1

TESTIMONY OF DR. ANDREW STEER

PRESIDENT AND CEO, WORLD RESOURCES INSTITUTE

HEARING BEFORE THE HOUSE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY:

“America’s Leadership Opportunity at the Paris Climate Conference”

DECEMBER 1, 2015

My name is Andrew Steer, and I am President and CEO of the World Resources Institute. The World

Resources Institute is a non-profit, non-partisan research institution that goes beyond research to

provide practical solutions to the world’s most urgent environment and development challenges. We

work in partnership with scientists, businesses, governments, and non-governmental organizations in

more than seventy countries to provide information, tools and analysis to address problems like food

and energy security, water management, urbanization, and climate change. Our focus is on how to grow

the economy, while protecting it for our grandchildren.

My testimony has three main themes. First, the United States can achieve a low-carbon future and

provide global leadership by harnessing key drivers of economic growth. Second, the U.S. has set an

ambitious but achievable emissions reduction target for 2025 in its Intended Nationally Determined

Contribution. Third, the leadership the U.S. is demonstrating at home is paying significant dividends,

helping to spur greater action by all countries around the world, both developed and developing.

First, a growing body of evidence shows that economic growth is not in conflict with efforts to reduce

emissions of greenhouse gases. The Global Commission on the Economy and Climate, which delivered a

landmark report in 2014, Better Growth, Better Climate: The New Climate Economy Report, has shown

that the perceived choice between growth and climate action is a false dilemma.1 New evidence is

demonstrating that smart climate policies promote economic efficiency, drive technological advances,

provide policy predictability for investors, generate huge economic co-benefits, and reduce the negative

impact on growth of climate change itself.

The United States has tackled many environmental problems over the past 50 years, and the historical

record is clear: environmental protection is compatible with economic growth, and environmental

policies have delivered huge benefits to Americans. Furthermore, recent experience at the state and

national levels demonstrates that well-designed policies can reduce greenhouse gas emissions while

providing overall net public benefits, for example, through improved public health, as well as direct

financial benefits to businesses and consumers.

The solutions typically lie in improved efficiency in resource use, smarter city growth, more efficient

development of rural areas, cleaner fuels, and new technologies and processes – and these solutions

often create net economic benefits. For example, we know that increased efficiency pays off. With

strengthened fuel efficiency standards, drivers will save on average a net $3,400 to $5,000 over the life

2

of light-duty vehicles built in 2025 compared with those made in 2016. Federal appliance efficiency

standards put into place over the past twenty-five years resulted in $370 billion in cumulative utility bill

savings. States with energy efficiency targets and programs in place are saving customers at least $2 for

every $1 invested.2

Other countries also recognize the benefits of acting on climate change. In the lead-up to the Paris

climate summit, more than 180 countries have put forward national climate action plans (known as

Intended Nationally Determined Contributions, or INDCs) that both address climate change and can

generate better growth for their economies.3

Businesses have recognized the economic value of action. More than eighty major global companies,

including eighteen U.S. companies – including Dell, Coca-Cola, General Mills, and Procter & Gamble –

have committed to setting emissions reductions targets in line with science.4 And recognizing the global

nature of their operations, more than 80 U.S. companies – including Alcoa, Bank of America, Cargill,

Coca-Cola, General Motors, Microsoft, PepsiCo, UPS, and Walmart – recently signed a pledge in support

of a strong international agreement and committed to significant actions in their own supply chains.5 Six

major U.S. banks and investors also recently signed a statement supporting strong international action

in order to set clear expectations and market signals.6 Around 435 businesses worldwide already use an

internal carbon price to guide investment decisions. For a number of major oil companies – including

Shell, BP, Exxon-Mobil, and ConocoPhillips – the internal carbon price is typically around $40/t CO2.7

Taking action is essential because no nation is immune to the impacts of climate change and no nation

can meet the challenge alone. Every nation needs to work together, take ambitious action, and do its

share. The United States has always provided leadership when the world faces big challenges, and

climate change should be no exception. That leadership can ensure a livable planet for ourselves and

future generations.

With global GHG emissions still on the rise, delaying action on climate change will only result in climate-

change-related events becoming more frequent and severe, leading to mounting costs and harm to

businesses, consumers, and public health. The new EPA report, Climate Change in the United States:

Benefits of Global Action,8 estimates billions of dollars of avoided damages in the U.S. that would result

from global efforts to reduce greenhouse gas emissions, ranging from reduced damage to agriculture,

forestry, and fisheries, to reductions in coastal and inland flooding, to fewer heat-driven increases in

electricity bills.

If nations fail to combat climate change together, the U.S. will suffer billions of dollars of damages to

agriculture, forestry, and fisheries, and to coastal and inland flooding, along with heat-driven increases

in electricity bills, just to cite some of the impacts. A recent report from the CNA Military Advisory Board

– composed of retired high-ranking military officers – also highlighted the increased threats to national

security from the effects of climate change.9 It is thus in our national interest to act at home so that we

can work with other countries to achieve a universal international agreement where all countries act

and where the most severe impacts in the U.S. can be avoided.

3

Second, the U.S. has set an ambitious but achievable emissions reduction target for 2025 in its INDC.

WRI research finds that the United States can meet this target using existing federal laws combined with

actions by the states. The United States can accelerate recent market and technology trends in

renewable energy, energy efficiency, alternative vehicles, and many other areas to reduce emissions 26–

28 percent below 2005 levels by 2025. However, U.S. and global efforts to combat climate change

cannot stop in 2025. Even deeper greenhouse gas (GHG) emission reductions will be needed in the

decades ahead to avoid the worst impacts of climate change. In the meantime, however, the

Administration is taking sensible steps to encourage recent market and technology trends that move us

toward a low-carbon future. These measures would be even more effective if complemented by

measures that only Congress can take.

The United States can achieve the INDC target in concert with economic growth. Over the next decade,

the proposed Clean Power Plan will play a key role in meeting the INDC target. Damage to health from

air pollution in the United States is estimated to amount to as much as 4% of GDP per year on average.10

From a benefit-cost perspective, EPA estimates that just the air pollution co-benefits of the Clean Power

Plan are worth $25-$62 billion, far more than the estimated $7-9 billion in compliance costs.11 Adding in

global climate benefits increases total benefits to $55-$93 billion.

Third, the leadership the U.S. is demonstrating at home is paying significant dividends, helping to spur

greater action by all countries around the world, both developed and developing. The national climate

plans (INDCs) that countries have submitted for the 2015 climate agreement represent action by a wide

diversity of countries. Of the 183 countries that have submitted national plans, 142 of them are

developing countries.12 The historic Joint Announcement on Climate Change by the United States and

China last year, along with the recent Joint Presidential Statement, also demonstrate the tremendous

shift in action by countries around the world.13

The national climate plans will deliver significant reductions in emissions. Analyses of the INDCs come to

the conclusion that the implementation of INDCs would contribute to significant reductions of global

GHG emissions compared to business as usual (approximately 3-8 gigatons of greenhouse gas emissions

reduced in 2030). The International Energy Agency’s Energy and Climate Change Report estimates that

the path set by the INDCs would be consistent with an average global temperature increase of around

2.7 degrees Celsius ( 4.8 Fahrenheit) by 2100,14 compared to an almost 4 degrees Celsius temperature

increase given business as usual (BAU) policies.15

Moreover, the agreement that will be reached between all countries at the climate summit in Paris will

be a major step forward in meeting U.S. objectives on climate change internationally. The agreement

will be universal and applicable to all, will ensure transparency, and will be durable and effective.

Building on and implementing the United Nations Framework Convention on Climate Change (UNFCCC),

which was ratified by the Senate in 1992 by voice vote, the agreement will mark a critical step forward

by involving action to reduce emissions by all countries, both developed and developing. Its structure,

based on nationally-determined plans, has enabled broad-based participation and buy-in from all

countries and sets a new pathway for international action.

4

The agreement will also include vital provisions on transparency and accountability to provide assurance

that all countries are following through in meeting their targets. The agreement must also be durable,

able to accommodate countries’ evolving development and economic circumstances and ensure that all

countries continue to move forward in a regular and timely way toward a commonly understood

objective. Finally, it must be an effective agreement, driving the finance and investment needed for

low-carbon climate resilient pathways from an array of countries and actors, including the private

sector, while also meeting the need to address the serious impacts experienced by all countries, and

especially the most vulnerable.

The action that countries around the world are taking, along with the international framework to

support that broad-based action, should be viewed as a significant success for the United States and its

leadership role. Meeting the global challenge of climate requires global solutions, including actions by

all. The world is now on the cusp of an international climate agreement that will concretize that vision.

My testimony is organized as follows: Section I discusses why the United States can take meaningful

climate actions while growing the economy overall and why U.S. leadership on climate change is

essential. Section II reviews technology and market trends in some key sectors and demonstrates how

accelerating these trends can reduce carbon emissions while generating positive economic impacts.

Section III presents an overview of WRI analysis showing how the United States can meet or exceed its

INDC target with a portfolio of policies across key sectors. Section IV describes the national climate

plans prepared by many countries and the benefits for the United States of the 2015 international

agreement. Section V offers some concluding comments on climate policy.

I. Climate Protection and Economic Growth A growing body of evidence had found that economic growth and action on climate change can now be

achieved together. According to the New Climate Economy Report, the scale of investment over the

next 15 years means we now have a huge opportunity to create better growth and reduce the risk of

climate change. Around US$90 trillion globally will be invested in cities, land use and energy

infrastructure between now and 2030.16 Choosing to invest that money in a low-carbon way will bring

multiple economic benefits and reduce the negative economic impacts of climate change.

Climate-smart policies promote economic efficiency, an area where the US has always been a global

leader. These policies involve more efficient use of energy and natural resources, putting a price on

greenhouse gas emissions, and removal of subsidies to fossil-fuels.

Efforts to reduce greenhouse gas emissions have already proven to be a win for local economies and

jobs in the northeast United States. The Regional Greenhouse Gas Initiative (RGGI) is a cooperative

effort by nine New England and Mid-Atlantic states to cap and reduce emissions from the power sector.

Economic growth in the nine RGGI states has been higher than in the rest of the states, at the same time

as they have reduced their emissions by 18% compared to 4% in other states. The RGGI contributed a

net benefit of $1.3 billion to these member economies in 2012-2014 alone, generating 14,200 new job

years. All nine participating US states showed net job additions.17

5

Climate-smart policies also drive technological advances. They involve policies to support the research,

development and deployment of new technologies. The growth of wind and solar power

has consistently outstripped projections from the International Energy Agency.18 The IEA’s 2007

projections for renewables in 2030 have already been met.19 Even Greenpeace underestimated how

much solar would grow.20 The US is a world leader in developing and deploying the technologies that

drive tomorrow’s prosperity.

In the coming years, the global clean energy market will expand dramatically, and it represents a

significant opportunity for U.S. economic growth. The cost of LED lights has dropped 90% since 2008,

large-scale solar by 60%, and wind and battery prices declined by over 40%. And with decreasing costs

has come greater deployment. Since 2008, we’ve gone from 400,000 LED lightbulbs to more than 78

million installed, wind energy production has tripled, and solar has increased more than twenty-fold.21

It is imperative that the United States continues to lead on clean energy innovation. On Monday in Paris,

President Obama announced how this will happen. The president, along with a wide range of other top

global leaders, announced “Mission Innovation,” an initiative by 20 countries to double their respective

clean energy research and development investment over five years to address global climate change,

provide affordable clean energy to consumers, and create additional commercial opportunities in clean

energy.22 Mission Innovation parallels a private sector effort, spearheaded by Bill Gates, which includes

a coalition of over 28 significant private capital investors from 10 countries, and will be called the

Breakthrough Energy Coalition.23 The combination of public and private sector investment will ensure

that large scale penetration of clean energy technologies.

Clean energy technologies will deliver hundreds of thousands of new jobs and deliver huge economic co-

benefits in the United States. The U.S. solar industry is creating jobs twenty times faster than the overall

economy.24 There are already more solar workers than coal miners in the United States. A clean energy

future could create on average 550,000 net jobs per year in the United States between now and 2050,

according to a study from Synapse Energy.25 Another new economic analysis from NextGen Climate

America found that a clean energy economy will create more than 1 million additional jobs by 2030,

increase U.S. GDP by $145 billion, increase household disposable income by $350-$400, and save

families $5.3 billion on energy bills.26

Energy efficiency, another powerful way to reduce emissions, can also unlock savings for U.S. citizens.

Investment in energy efficiency could boost global cumulative economic output by US$18 trillion by

2035, according to the New Climate Economy.27 The United States’ Energy Star program has already

lowered household utility bills by an estimated US$360 billion since 1992.28

While total policy certainty can never be guaranteed, it is always important for policy-makers to look at

ways of making policy more credible and predictable. Climate-smart policies can provide a credible and

predictable policy environment, which investors from the US and around the world crave. A price on the

emissions of greenhouse gases, research and development funding, feed-in-tariffs, and tax credits: these

policies give private investors the confidence needed to invest in, and deliver, greater economic

efficiency and innovation, which will drive the productivity of all forms of capital and growth.

6

Many of the pessimistic economic models cited by opponents of climate action have serious

shortcomings, as described in the 2014 report of the Global Commission on the Economy and Climate

(Better Growth, Better Climate):

The view that there is a rigid trade-off between low-carbon policy and growth is partly due to a

misconception in many model-based assessments that economies are static, unchanging, and

perfectly efficient.… Indeed, once market inefficiencies and the multiple benefits of reducing

greenhouse gases, including the potential health benefits of reduced air pollution, are taken into

consideration, the perceived net economic costs are reduced or eliminated.29

Our country has tackled many environmental problems over the past 50 years. We have achieved major

reductions in air and water pollution. We have reduced our exposure to toxics, and cleaned up and

redeveloped industrial “brownfield” sites in our cities. In concert with other nations, we have taken

steps to repair damage to the ozone layer. At every step along this road to protection of the

environment and public health, opponents have raised the specter of excessive cost and economic

disaster. Some opponents of President’s emission reduction targets and the Clean Power Plan are raising

this specter again now. However, the historical record is clear: environmental protection is compatible

with economic growth, and U.S. environmental policies have delivered huge benefits to Americans. In

2010, The Office of Management and Budget reviewed 20 years of major Federal regulations (1999-

2009) for which agencies estimated and monetized both benefits and costs, and found aggregate annual

benefits of $128-$616 billion, while annual costs were estimated at $43-$55 billion. Research also shows

that the actual cost of environmental regulations frequently ends up being less than ex ante predictions

by industry, and even the EPA.30

The movement toward a low-carbon economy is already being demonstrated throughout the United

States. Already between 2005 and 2012, greenhouse gas emissions dropped by 8 percent while real GDP

grew by 8 percent.31 Projections from the U.S. Energy Information Administration (EIA) estimate that the

intensity of energy use in the economy will continue to decline through 2040, even in the absence of

new policies. With reduced energy intensity in manufacturing, more efficient appliances and buildings,

and more fuel-efficient vehicles coming to market, the overall economy is becoming more energy

efficient. EIA projects that GDP will grow at an average 2.4 percent per year through 2040, while energy

use will grow at only 0.4 percent per year.

Businesses have recognized the economic value of action. More than eighty major global companies,

including eighteen U.S. companies – including Dell, Coca-Cola, General Mills, and Procter & Gamble –

have committed to setting emissions reductions targets in line with science.32 More than 80 U.S.

companies – including Alcoa, Bank of America, Cargill, General Motors, Microsoft, PepsiCo, UPS, and

Walmart – recently signed a pledge in support of a strong international agreement and committed to

significant actions in their own supply chains.33 Six major U.S. banks and investors also recently signed a

statement supporting strong international action in order to set clear expectations and market signals.34

435 businesses worldwide already use an internal carbon price to guide investment decisions. For a

number of major oil companies – including Shell, BP, Exxon-Mobil, and ConocoPhillips – the internal

carbon price is typically around $40/t CO2.35

7

In the context of meeting the U.S. INDC target, the proposed Clean Power Plan will play a key role. The

Energy Information Administration projects the macroeconomic impacts of the proposed plan to be very

small: approximately a 0.12% decrease in GDP in 2030, which can be considered “background noise” in

the context of a steadily growing $24 trillion economy. Employment impacts are essentially zero.36 From

a benefit-cost perspective, EPA estimates that the air pollution co-benefits alone are worth $25-$62

billion, far more than the estimated $7-9 billion in compliance costs.37 Adding in global climate benefits

increases total benefits to $55-$93 billion.

To get the full economic picture, one must also assess the cost of the impacts of climate change. Failure

to reduce emissions will increase economic, social, and environmental risks for the United States and all

nations.38 With global GHG emissions still on the rise,39 delaying action on climate change will only result

in climate-change-related events becoming more frequent and severe, leading to mounting costs and

harm to businesses, consumers, and public health. Climate smart policies reduce these negative impacts

on growth.

We are becoming more aware than ever of the true costs of a high carbon economy in the United

States. Inaction on climate change could reduce the United States’ per capita GDP up to 36% by the end

of the century, according to a new estimate from leading researchers in Nature.40 Damage to health

from poor air quality, much of which is associated with burning fossil fuels, is valued at about 4% of GDP,

according to the New Climate Economy.41 Urban sprawl is immensely expensive, raising the costs of

infrastructure and service delivery up to 40% and costing the United States around $1 trillion per year.42

Subsidies and tax breaks for the production of oil, coal, and gas cost U.S. federal and state governments

approximately $20.5 billion annually, distorting investment and consumption choices.43

The new EPA report, Climate Change in the United States: Benefits of Global Action,44 estimates billions

of dollars of avoided damages in the U.S. that would result from global efforts to reduce greenhouse gas

emissions, ranging from reduced damage to agriculture, forestry, and fisheries, to reductions in coastal

and inland flooding, to fewer heat-driven increases in electricity bills. We are already experiencing the

effects of climate change. Last year the world experienced the hottest year on record in 2014.45

Fourteen of the fifteen hottest years on record have occurred since 2000.46 In the United States, some

regions are experiencing a higher frequency of flooding, heavier precipitation events, and more frequent

heat waves and wildfires.47

Extreme weather events are expensive. Between 1980 and 2014, the United States experienced 178

extreme weather and climate events that cost at least $1 billion each with total damages of more than

$1 trillion.48 The frequency and severity of these types of events have increased over the same period,

with four of the six years with the most billion dollar disasters on record in the United States have

occurred since 2010. Hurricane Sandy cost New York City $67 billion, with power outages, subway

tunnel flooding and other problems persisting well after the storm.49 A similar increase in these costly

events is happening around the world. 50,51 While many factors contribute to the cost of these events,

such as growing population density and increased development in vulnerable areas more prone to

extreme events, increasing global temperatures and climate variability are making certain types of these

costly events more frequent and severe.

8

According to Risky Business, if we continue on our current emissions path without significant

adaptation, by the end of the century some states in the Southeast, lower Great Plains, and Midwest risk

up to a 50% to 70% loss in average annual crop yields (corn, soy, cotton, and wheat), absent agricultural

adaptation.52

The true costs of a continuing with a high-carbon economic growth model in the United States are much

higher than previously realized, and they are rising as concentrations of greenhouse gases in the

atmosphere increase year on year. The true job killer is inaction on climate change – not the solutions

we need to stop it.

Moreover, a recent report from the CNA Military Advisory Board – composed of 16 retired three- and

four-star military officers – highlighted the increased threats posed to national security by the effects of

climate change, including massive population displacement, conflicts due to food and water scarcity,

and health catastrophes.53 These are not only security threats, but also present substantial potential

costs to our military and humanitarian relief agencies.

U.S. leadership is critical to the success of the global efforts necessary to avoid billions of dollars in

damaging costs to our country. That leadership is paying off as countries have submitted their INDCs and

as we move toward an agreement in the international climate negotiations that culminate in Paris.

II. Technology Trends and Emission Reduction Potential in Key Sectors

Many of the key drivers of economic growth—including more efficient use of energy and natural

resources, smart infrastructure investments, and technological innovation—can also drive the transition

to a low-carbon future.54 Early efforts to address conventional air and water pollution often relied on

end-of-smokestack or end-of-pipe controls. However, in the case of carbon pollution, the solutions

typically lie in improved efficiency in energy use, cleaner fuels, and new technologies and processes.

Though upfront investments are often needed, these solutions often create net economic benefits

rather than costs. The United States can bring the same spirit of competition, ingenuity, and innovation

to the climate challenge that it has brought to solving other problems, or it can be left behind as other

countries develop the solutions and capture the markets for the fuels, technologies, and processes that

reduce emissions.

Opportunities for cost-effective emission reductions are arising across many sectors of the economy. For

instance, the capital costs of wind and solar photovoltatic systems continue a rapid downward trend.55

For example, Texas has seen wind generation multiply 12-fold since 2002, and solar generation in the

state has more than doubled since 2011.56 Over 102,000 people are directly employed in renewable

energy sectors in Texas, with thousands more working in businesses linked to renewable energy. Well-

crafted energy efficiency programs are lowering utility bills and reducing energy demand, which

indirectly reduces GHG emissions.57 Increased production of low-cost shale gas, while raising concerns

about methane emissions and other environmental impacts, has spurred fuel switching away from coal

in power generation, reducing carbon dioxide (CO2) emissions.58 Technological progress on many fronts

9

promises to create further opportunities, from creating climate-friendly refrigerants to breakthroughs in

electric and fuel cell vehicles.59

Nevertheless, market barriers still exist, hindering investment and implementation of strategies needed

to transition the United States toward a prosperous low-carbon economy. These barriers take many

forms and cut across many sectors. For example:

Split incentives - The natural gas sector is not very well vertically integrated – many independent

companies work along the supply chain without ever taking ownership of the natural gas itself.

For this reason, the incentives to invest in control technologies to reduce methane emissions are

often poorly aligned.

Ownership transfer issues - In the residential sector, homeowners may not invest in energy

efficient products or home upgrades, thinking they may move before reaping the cost savings.

Network effects - Widespread penetration of alternative vehicles depends on availability of

charging stations, but investment in charging stations may be limited while relatively few

alternative vehicles are on the road.60

Overcoming these barriers will require targeted policies and measures, including GHG and efficiency

standards, more research and development to stimulate innovation, and policies to stimulate market

demand for new technologies.61 The sections below explore opportunities in some key sectors.

A. Producing Cleaner Electricity

The U.S. power sector has already started to transition to a lower-carbon future.62 In 2013, carbon

dioxide (CO2) emissions were 15 percent below 2005 levels because of a shift in fuel mix and slower

demand growth. Coal’s role appears to be diminishing while natural gas and zero-carbon alternatives

are on the rise. The economics of all generation sources are shifting and if these trends continue, deep

greenhouse gas reductions are possible from the power sector, with some parts of the country possibly

achieving net savings. In many cases, the public health benefits outweigh the costs of replacing older,

inefficient, and heavily polluting generation with newer, more efficient, cleaner generation.

The recent decline in the carbon intensity of the power sector has been caused in large part by the low

price of natural gas.63 Because of lower prices, gas-fired generation has surged and coal fired generation

has declined. New coal plants accounted for only 5 percent of the new capacity built since 2000.64 This

trend could accelerate as many existing coal plants struggle to compete with electricity from natural gas

and renewable energy sources and if more protective public health standards are put in place. Existing

natural gas plants certainly have the capacity to increase output. In 2014, the fleet of combined-cycle

natural gas plants ran at only about 48 percent capacity65—well below their design capacity of 85

percent. Less coal generation would bring not only reductions in CO2 emissions, but also would likely

bring reductions in a variety of harmful pollutants, including sulfur dioxide (SO2), nitrogen oxides (NOx),

and mercury.

Despite its reputation as a clean fuel, natural gas production, processing, transmission, and distribution

still leak methane emissions while its combustion results in substantial CO2 emissions, presenting long-

10

term challenges for the fuel, in absence of adoption of technologies that reduce methane leaks and cost-

effective carbon capture and storage technology. However, natural gas is still essential in reducing

power sector emissions. Replacing all existing coal generation with combined-cycle gas generation could

reduce power-sector CO2 emissions by 44 percent below 2012 levels.66 In addition, as variable

generation from resources such as wind and solar increases, grid operators will look to flexible resources

such as natural gas to help ensure grid reliability. As a result, natural gas could play an important role

even in an aggressive greenhouse gas abatement scenario.

Renewable generation has been on the rise in recent years, and evidence suggests that it could play an

even more significant role in the future. Generation from renewable resources accounted for 12.5

percent of total generation in 2013 – nearly half of which came from non-hydropower sources.67

Renewables represented 85% of the increase in power generation in 2014.68 Wind and solar

outcompete new coal generation in many markets, and are competitive with low-cost natural gas

generation in a few markets. As a result, increased renewable energy generation has the potential to

save American ratepayers tens of billions of dollars per year over the current mix of electric power

options, according to studies by Synapse Energy Economics and the National Renewable Energy

Laboratory.69 These cost savings are illustrated by some recent actions at the state level:

The Grand River Dam Authority, Oklahoma's state-owned utility, purchased 100MW of wind

energy that is estimated to “save its customers about $50 million over the project’s lifetime”.70

DTE Energy in Michigan announced that it would be lowering customers’ electricity rates by 6.5

percent in 2014, citing low-cost wind energy (aided by technology improvements and tax

credits) as a major factor.71

Austin Energy in Texas finalized a power purchase agreement for 150 megawatts of solar

energy, with a price just under 5 cents per kilowatt hour (estimated at 7 cents per kilowatt hour

before federal tax credits).72 By comparison, the company estimates that new natural-gas-fired

generation would have cost 7 cents per kilowatt hour, coal would have cost 10 cents, and

nuclear 13 cents.

MidAmerican Energy in Iowa recently announced that it will invest $1.9 billion in new wind

power, bringing wind generation up to 39 percent of their generation portfolio.73 The company

estimates that this will save $10 million annually when all the turbines are completed. This work

will create 460 construction jobs, 48 permanent jobs, and generate more than $360 million in

new property tax revenue.

While the variability of renewable generation creates some challenges for grid balancing authorities,

renewables have considerable room to expand on the grid. Several studies have shown that existing

grids across the country can handle about 35 percent generation from variable renewable resources

with minimal cost.74 This is partly because of improvements in renewable energy forecasting and sub-

hourly supply scheduling, as well as recent increases in transmission infrastructure.75,76 Utilities may also

see the value in using renewable energy (with zero fuel costs) as a hedge against the uncertainty

surrounding future coal and natural gas prices.77

11

Over the longer term, however, as renewable penetration continues to increase with expected declines

in equipment costs, the United States would benefit from expanded transmission78 and increased

system flexibility. This could be done, for example, through increased grid storage, distributed

generation sources, and demand response.79

Nuclear power provides zero-carbon baseload generation. In 2013, it produced 20 percent of total U.S.

electric generation80 and as of mid-2014, three new nuclear plants were under construction, the first

new plants since 1996.81 However, several nuclear reactors closed in 201382 and some analysis suggests

that some other plants are struggling to remain viable because of cheap natural gas, low renewable

energy prices, lower demand for electricity, and rising costs for nuclear fuel, operations, and

maintenance (particularly the smaller, older, standalone units).83 Continued retirements could prompt

an increase in fossil baseload generation and lead to an overall increase in CO2 emissions from the

power sector. Even if these pressures do not force nuclear capacity to retire prematurely, the nation will

eventually need to replace some of these units as they reach the end of their useful lives. Well-designed

policies that value low-carbon generation could help improve the economics of the existing fleet, and

could spur the construction of new nuclear units, particularly if increasing international development of

nuclear plants leads to reductions in construction costs. Any expansion, however, will likely depend on

solving the challenges of public concerns about nuclear safety and long-term waste storage.

EPA’s Clean Power Plan (CPP), finalized in August 2015, will build on and accelerate many of these

positive trends noted above by establishing CO2 emissions standards for existing power plants under

section 111(d) of the Clean Air Act. These standards incentivize the use of lower carbon sources of

electricity generation, like natural gas, renewables, and nuclear, as well as incentivize programs that

reduce the overall demand for electricity. EPA projects that the CPP will reduce power sector CO2

emissions by about 28-29 percent below 2005 levels by 2025 and by 32 percent by 2030.84 The CPP also

offers huge health benefits at four to nine times the amount of compliance costs. In total, the standards

are expected to result in $32 to $54 billion in health benefits and global climate benefits per year by

2030, far outweighing the costs of $5.1 to $8.4 billion.

Given current technology trends in renewable power, these estimates may actually be overly

conservative, and deeper reductions may be possible at a net public benefit. For example, when

examining deep emission reductions in the power sector (approximately 61 percent below 2005 levels in

2030), the Union of Concerned Scientists found that on an annualized basis, benefits to Americans from

reduced SO2 and NOx emissions alone would total $56 billion in 2025, growing to $69 billion in 2030

(equal to 5 and 10 times the annual compliance cost to the power sector).85 And studies have also

shown that a more rapid decarbonization of the power sector in the post-2020 time period is technically

possible as well as legally defensible.86

B. Reducing Electricity Consumption

The U.S. economy is becoming more efficient as a result of development and deployment of new

technologies supported by state and federal policies. This success is largely due to the fact that smart

investments in efficiency save money. Federal appliance standards implemented since 2009 alone are

expected to save consumers nearly $450 billion because of lower electricity bills through 2030. 87,88,89

12

State efficiency portfolios regularly save customers over $2 for every $1 invested, and in some cases up

to $5.90 And efficiency has been the cheapest resource option available to utilities for decades, with

levelized costs one-half to one-third the cost of new electricity generation options. 91,92 Harnessing

efficiency as a resource leads to high-quality jobs in manufacturing, installation of efficient appliances,

home energy auditing, and more. In part due to the expansion of efficiency programs, energy

consumption is expected to grow at less than 0.5% per year on average through 2040 even as GDP

grows by nearly 2.5% per year.93 But even greater opportunities to capture efficiency and associated

savings can be captured by scaling up successful programs and implementing new initiatives.

The discussion below focuses specifically on homes and commercial buildings (with efficiency

opportunities in transportation and industry discussed later). In buildings, electricity demand growth

has fallen from about 8 percent per year in the early 1970s to about 1 percent per year today.94 This is in

part due to a robust and growing portfolio of both regulatory and voluntary energy efficiency initiatives

including:

Appliance and equipment standards, labeling, and research and development

Customers have saved over $370 billion (net) as a result of lower utility bills from 1987 through 2012

as a result of federal appliance and equipment standards that set minimum energy efficiency levels

for more than 50 products commonly used in homes and businesses.95 This success has been

achieved in part because major appliances—including refrigerators, dishwashers and clothes

washers—have become 50 to 80 percent more energy efficient over the past two decades.

Appliance and equipment standards are complemented by other federal and state initiatives,

including research and development, partnerships with industry, competitions (e.g., L-prize and

ENERGY STAR awards), voluntary labeling programs (e.g., ENERGY STAR and the Federal Trade

Commission’s Energy Guide), and rebates and incentives for efficient appliances. Together, these

programs can drive innovation and commercialization of products that are more efficient than the

minimum required by standards, as has been demonstrated in many product areas including

lighting, water heaters, and clothes dryers.96 The Institute for Electric Innovation projects that

pushing forward on new federal appliance and efficiency standards could reduce total electricity use

by 6–10 percent below projections in 2035.97

State energy efficiency savings targets

Twenty-four states currently have mandatory electricity savings targets that require utilities and

third-party administrators to offer energy-saving programs to their customers.98 Most state targets

require incremental electricity savings of 1 percent of projected electricity sales or more each year

once programs are fully ramped up, with a few requiring savings in excess of 2 percent per year.

Scaling up state energy efficiency savings targets so that each state achieves savings of 2 percent

annually would reduce electricity consumption in the range of 400–500 terawatt hours in 2035 (9–

11 percent of total projected electricity sales),99 and save customers tens of billions of dollars in the

process.

State building energy codes

13

Building codes help ensure that new construction and buildings undergoing major renovations and

repairs meet minimum efficiency standards. According to the DOE, codes adopted between 1992

and 2012 have saved approximately 2 quads in cumulative total energy savings, about 20 percent of

the total energy directly consumed by homes each year. The codes are expected to net more than

$40 billion in energy cost savings over the lifetime of the buildings constructed during this time

period.100 To date, many states have adopted the 2007–09 codes for commercial and residential

buildings. However, only about one-quarter of states have adopted the most up-to-date codes for

residential and commercial buildings. The new codes reduce building energy use by 20 and 25

percent, respectively, compared with the 2007–09 standards—leaving the door open for greater

savings by other states.101

The continued emergence of new technologies—enabled by partnerships between federal agencies,

manufacturers, and businesses—will create ongoing opportunities for savings. For example, DOE

recently reached an with agreement manufacturers and efficiency advocates on the terms of an

updated efficiency standard for commercial rooftop air conditioners that will net $50 billion in utility bill

savings for businesses over 30 years.102,103

DOE is also working with industry to advance adoption of next-generation intelligent energy information

systems and controls that provide whole-building, web-accessible data in real time. These systems allow

facility managers to identify wasted energy, with the potential of cutting building electricity use by as

much as 30 percent.74 Whole-building retrofits with the latest technologies have been shown to reduce

building energy use in the range of 30 to 50 percent or greater, in some cases.104 And the jobs needed to

perform retrofits—including assessment, installation and maintenance of efficient appliances and

systems—can’t be sent overseas.

But opportunities to cut energy use and utility bills still exist. Studies suggest that electricity demand

could be reduced 14 to 30 percent below projected levels over the next two decades, creating hundreds

of billions of dollars in net savings for consumers while significantly reducing U.S. greenhouse gas

emissions.105 These opportunities remain because of the persistence of a number of market barriers to

investment in efficient technologies. For example, building owners frequently have little incentive to

invest in efficiency if they do not pay the energy bills and therefore do not experience the financial

benefits, another example of the “split incentives” problem noted earlier. Building occupants may not

expect to capture the full lifetime benefits of an investment, thus creating “ownership transfer” issues.

This is because residential energy efficiency measures have an average payback period of about 7 years,

whereas about 40 percent of homeowners will have moved within that duration of time. Other market

barriers, including capital constraints and lack of knowledge of the lifecycle costs and benefits of

products, can also prevent the implementation of cost-effective efficiency measures. The United States

can harness more of this potential and continue to save money for consumers and businesses in the

near to medium term by scaling up existing programs and implementing new policies.

The EPA has an important role to play by making sure that the Clean Power Plan takes into account all

cost-effective energy efficiency potential when developing state-specific standards. This would

encourage more widespread deployment of state efficiency programs, leading to greater demand

14

reductions and savings for consumers. The U.S. Department of Energy (DOE) and EPA also should

continue to scale up their existing programs, which are already delivering benefits many times greater

than their costs. This includes continuing to strengthen existing appliance standards (for example, for

residential boilers, commercial unit heaters); setting appliance standards for equipment not currently

covered (for example, for ovens, commercial ventilation equipment, general service lamps); increasing

funding for research, development, and deployment of efficient technologies and processes; expanding

partnerships with businesses and industry (for example, DOE’s Better Buildings Challenge); and

expanding efficiency labeling programs (for example, ENERGY STAR). New and strengthened appliance

standards and less energy-intensive manufacturing together with the Clean Power Plan could lead to

total electricity demand reductions of at least 9–10 percent below projected levels in 2025 and 11–13

percent in 2030.

These policies should include or be complemented by other state, federal, and local actions including:

(1) updates to building codes and improvements to their enforcement, (2) measures to promote

retrofits of existing buildings, and (3) expanded access to low-cost finance for efficiency projects.

C. Cleaner & More Fuel Efficient Transportation

The U.S. transportation sector is becoming less carbon intensive due in large part to the most recent

federal GHG emission and fuel economy standards covering light-duty cars and trucks (model year

2012–25). A declining growth rate in vehicle miles traveled (VMT) by passenger vehicles also has

contributed to declining emissions from light-duty vehicles over the past decade. Looking ahead, existing

and proposed standards for medium- and heavy-duty vehicles and the development of CO2 standards

for aircraft will continue to increase the efficiency of the U.S. transport system, leading to even more

fuel savings for households and businesses.

1. Passenger Vehicles

The Administration started to take bold action in this sector in 2010 when EPA and DOT established GHG

and fuel economy standards for MY 2012-2016 passenger vehicles, and again in 2012 when these

standards were expanded again to roughly double the fuel economy of model year 2025 vehicles. In

response to these rules, car manufacturers have been utilizing advanced technologies to increase the

fuel economy of their fleets- the number of sport utility vehicle models with a fuel economy of at least

25 miles per gallon (mpg) has doubled over the last five years, while the number of car models with a

fuel economy of at least 40 mpg has increased sevenfold.106 Analysis shows that, because of this

technology advancement, car manufacturers are actually outperforming the current standards and are

on track to meet the model year 2025 standards.107 As new vehicles become more efficient, they will

also save consumers money, improve air quality, and increase energy security by lowering oil demand.

Once fully implemented, owners are expected to save on average $3,400 to $5,000 (net) over the life of

their vehicle, compared with model year 2016 vehicles. The automobile industry may even be on the

brink of an even greater transition. Advances in electric vehicle battery technology, along with the

anticipated roll out of fuel cell vehicles in the 2015–17 could transform automobile industry. Battery

prices have fallen by more than 40 percent since 2010. Some industry analysts are predicting that by the

15

early 2020s, long-distance electric vehicles will be cost-competitive with internal-combustion-engine

vehicles, thanks to fuel price savings, even without federal incentives.108

2. Transportation and Land Use

Transportation policies can also reduce passenger vehicle travel demand, thus lowering fuel use and

emissions from vehicles. Passenger vehicle travel demand is already growing more slowly now than in

the past decades, from an average growth rate of 3 percent per year from the 1970s to mid-2000s to 0.9

percent per year between 2004 and 2012 (measured in vehicle miles traveled).109 Multiple factors are

likely in play in this slowdown: the economic recession, changing demographics, high costs of driving

(including rising fuel prices until late 2014), changing consumer preferences, as well as policy initiatives.

It is uncertain whether these trends will continue or whether travel demand growth will rebound due to

continued recovery from the recession, population growth, changes in oil prices (such as the rapid

declines that occurred in late 2014), or other factors.

State and local policies should aim to provide more safe, reliable transit options for citizens, for instance

through compact development patterns coupled with improved public transportation and routes for

walking and biking. DOT, EPA, DOE, the U.S. Department of Housing and Urban Development, and other

federal agencies can encourage and support these efforts in a number of ways, including increased

funding for public transit infrastructure, implementation of performance criteria for funding that

incentivizes compact development and related strategies, research and development, tax policies that

promote infill development (such as renewal of the Federal Brownfield Tax Incentive), and technical

assistance.110

3. Medium- and Heavy-Duty Trucks

The medium- and heavy-duty truck sector also presents opportunities to reduce emissions while saving

fuel costs. Current medium- and heavy-duty vehicle GHG and fuel consumption standards are estimated

to result in $49 billion in net benefits to society (from fuel savings, CO2 reductions, reduced air pollution,

improved energy security due to decreases in the impacts of oil price shocks, and other benefits) over

the lifetime of model year 2014–18 vehicles.111 On June 19th, EPA and DOT proposed a second round of

standards for the post-2018 time frame that would increase the fuel efficiency of medium-and heavy-

duty vehicles up to 40 percent by 2027 compared to 2010 levels.112 This level of fuel savings can be

achieved using technologies that are currently available—such as tractor and trailer aerodynamic

enhancements, hybridization and electric drive, and weight reduction, among others—that are

estimated to have an average payback period of less than two years.113 EPA should finalize the second

round of standards in a timely manner and take the full potential of these cost-effective technologies

into account.

4. Aviation

The United States has also taken steps to address GHG emissions from airplanes through its emission

reduction plan for aviation.114 The Federal Aviation Administration has initiatives in place to improve fuel

efficiency through operations, including establishing direct routes and reducing delays, under its Next

Generation Air Transport Systems program.115 And on June 10th, EPA took the first steps toward setting a

16

carbon dioxide emissions standard for commercial airplane engines. In anticipation of an international

aircraft CO2 emissions standard, expected from the International Civil Aviation Organization in 2016, EPA

released an advanced notice of proposed rulemaking establishing the groundwork and seeking public

input on relevant issues like timing and stringency.116 It’s not yet clear what the international standards

will deliver, but studies show that there’s significant room for improvement in aircraft fuel efficiency, in

the range of 20-30 percent or greater in the 2025-30 timeframe through use of improved engines, lower

weight and reduced drag.117 EPA should set standards that take full advantage of these technologies,

aiming to improve the fuel efficiency of new aircraft in the range of 2-3 percent annually. FAA should

also continue to expand its initiatives to enhance the management of air travel.

D. Cleaner Industry

Industry is a broad category that includes a wider range of economic activities than the residential,

commercial, and transport sectors. The energy and emissions intensiveness of industrial activity varies

among manufacturing, construction, agriculture, energy transformation, mining, and forestry

subsectors.118 Total U.S. industrial sector emissions peaked at 1.9 billion metric tons of CO2 in 1979 and

have intermittently declined since the late 1990s. Between 2010 and 2014, real U.S. industrial sector

value-added grew by 7 percent while total industrial sector energy-related carbon dioxide emissions

dropped by one percent.119 Emissions reductions have been driven by a combination of efficiency

improvements, cleaner energy use, changing product mix, and additional combined-heat-and-power

(CHP) utilization.120 While the U.S. industrial sector has become more efficient, studies suggest that it

can move forward at an even faster pace, reducing energy consumption by 15 to 32 percent below 2025

forecast values.121 In 2014, total U.S. industrial sector emissions amounted to 1.5 billion metric tons

CO2, which covered 27 percent of total U.S. energy-related CO2 emissions.122

The industrial sector presents a large challenge and opportunity for moving the United States to a

prosperous low-carbon economy. The Administration’s commitment to reduce U.S. emissions can

improve industrial competitiveness by catalyzing innovation and investment. U.S. firms can leverage

low-cost clean energy and efficiency improvements to expand production and market share.123 Given

that the vast majority of U.S. emissions increases to 2040 are expected to come from industry and

manufacturing sector growth,124 this sector has a unique opportunity to benefit from forward-thinking

policies and new investments. Recent studies have clearly demonstrated the positive economic,

employment, and competitiveness benefits of investing in U.S. industrial energy efficiency. In 2012

Congress passed the American Energy Manufacturing Technical Corrections Act, which mandated that

the Secretary of Energy should produce a report on the deployment of industrial energy efficiency in the

United States. One high-level finding of the report, which was published in June, was that a $5 billion

Federal matching industrial energy efficiency grant program implemented over a 10-year period would

help support up to 9,700 to 11,200 jobs per year for the life of the program and help manufacturers save

$3.3 to $3.6 billion per year in energy costs by Year 5 of the grant program, and $6.7 to $7.1 billion per

year by Year 10 of the grant program.125 The Administration’s Climate Action Plan and international

commitments offer a framework for re-invigorating U.S. industry in a low-carbon economy.

17

Within the industrial end use of energy, energy efficiency improvements (including technical

improvements, material efficiency, and waste reduction) and fuel-switching are the primary levers for

industrial sector emissions reduction, in addition to reductions from combined heat and power usage.

Industrial sector demand, as reflected in the value of shipments, is expected to grow by more than a

third between 2015 and 2030.126 This growth creates opportunities for investments in efficiency and for

well-designed policy interventions.

Industrial energy efficiency is inhibited by persistent barriers, including financing (such as intra-company

competition for capital, corporate tax structures that allow companies to treat energy expenditures as

tax offsets, split incentives, and energy price trends), regulation (monopolistic utility business models

and cost-recovery mechanisms, exclusion of efficiency from energy resource planning), and

informational barriers (ignorance of incentives and risks, unavailable energy use data, and lack of

technical expertise).127 Industrial sector demand growth combine with barriers to energy efficiency

improvements to create a range of opportunities and challenges that will influence the absolute level of

total U.S. GHG emissions.

A 2010 National Academy of Sciences study estimated a cost-effective energy efficiency improvement

potential of 14 to 22 percent for the U.S. industrial sector by 2020.128 Numerous state and federal

policies have been enacted to accelerate industrial sector efficiency improvements. These include

regulations for equipment via emission performance standards under Boiler Maximum Achievable

Control Technology (MACT); EPA’s New Source Performance Standards; market and rate design that

helps to reduce industry sector GHG emissions by promoting clean distributed generation; tax credits,

exemptions and/or deductions; technical assistance from federal government agencies such as DOE’s

Better Buildings, Better Plants Program;129 and research grants such as Advanced Research Projects

Agency-Energy130 and DOE’s Advanced Manufacturing Office131 programs.

Reducing industrial sector GHG emissions below current levels will require additional investment and

policy action. Government can combine ambitious minimum performance standards for sources, along

with voluntary benchmarking and labeling programs to encourage further industrial efficiency

improvements.

E. Improved Production, Processing and Transmission of Natural Gas

Methane is the primary component of natural gas, and is therefore a valuable commodity.132 It is also a

potent greenhouse gas, with at least 34 times the global warming power of carbon dioxide.133 Emissions

of methane and other air pollutants occur throughout the natural gas life cycle, creating unnecessary

waste along with damage to the local environment and the global climate. 134 Without additional

policies, methane emissions from natural gas systems are expected to grow 4.5 percent by 2018, and to

continue to grow slowly over the coming decades.135 But the right policies will encourage investment in

cost-effective technologies and best practices that companies can use to reduce waste, save money, and

cut harmful emissions of methane and other pollutants.136

Dozens of proven technologies that minimize leaks and vents of methane are currently available and

deployed across the United States. However, their use remains uneven largely because of market

18

barriers that impair the ability of drillers and other service providers to capture the increased revenue

by changing equipment and practices. In addition to the “split incentives” noted above, these barriers

include:

Imperfect Information: Because emissions measurement technology is still expensive and not

widely used, many companies do not have a complete picture of how much methane they are

emitting, and from which sources. Most companies, therefore, are not aware how much money they

can save by investing in technologies that reduce methane emissions.

Opportunity Costs: Investing capital or engineering capacity in equipment to reduce or eliminate

natural gas leaks represents an opportunity cost for owners and operators of natural gas systems as

investments in projects that reduce wasted natural gas compete with other potential investments,

primarily the drilling of new production wells or other measures to increase natural gas production.

Even though most emissions-control technologies pay for themselves in three years or less, that may

not compare favorably to other investment opportunities.

While some companies active throughout the natural gas supply chain—from production through

distribution— have already recognized the economic advantages of investing in technologies that

reduce methane emissions, many have not. Voluntary measures reduce about 20 percent of methane

emissions from natural gas systems, according to EPA.137 But existing voluntary measures merely skim

the surface of available, cost-effective emissions reduction opportunities, according to recent studies

from the Natural Resources Defense Council (NRDC) and ICF Consulting.138 This suggests the states and

the federal government have ample opportunity to implement additional standards requiring reductions

in methane emissions to overcome these barriers.

EPA’s 2012 standards to reduce emissions of hazardous air pollutants, and volatile organic compounds

are expected to significantly reduce methane emissions, saving the industry approximately $10 million

per year in 2015 because the value of the avoided emissions of natural gas is greater than the cost of

equipment to capture it (annual savings are estimated at $330 million versus $320 million in compliance

costs). Importantly, these savings do not consider the benefit of reducing methane emissions and

conventional air pollutants. EPA estimates that the standards will reduce emissions of volatile organic

compounds by 172,000 metric tons in 2015 alone.139 Some studies have found that the health benefits

due to improved air quality could be as high as $2,640 per metric ton of volatile organic compounds

nationwide, with even higher benefits in some localities.140

EPA rulemakings have taken the first steps by indirectly reducing methane emissions in this sector, and

recently proposed methane standards for new and modified oil and gas infrastructure141 are an

important step in the right direction, but much remains to be done. One recent study estimated that 40

percent of emissions from onshore gas development can be eliminated at an average cost of a penny

per thousand cubic feet.142 EPA should propose and finalize standards on both new and existing natural

gas systems by 2017, and phase in implementation through 2020, to reduce methane leakage by 67

percent below business-as-usual projections. This can be achieved using existing technologies, many of

which pay for themselves in three years or less.

19

F. Reducing Emissions of High Global Warming Potential Gases

HFCs are used primarily for refrigeration, air conditioning, and the production of insulating foams. HFC

emissions have been increasing because they are a replacement of ozone-depleting substances

(chlorofluorocarbons and hydrochlorofluorocarbons) under the Montreal Protocol and Clean Air Act.

Unfortunately, some HFCs have very high global warming potential (GWP). Fortunately, alternatives with

low GWPs are increasingly available. Several companies have begun to use these alternatives, with many

saving money and energy while they reduce GHG emissions.143 For example:

Coca-Cola uses CO2 in 1 million HFC-free coolers and aims to purchase only CO2-based equipment by

2015.144 Because of its transition to CO2-based technology for new equipment, Coca-Cola has

improved its cooling equipment energy efficiency by 40 percent since 2000, and reduced its direct

greenhouse gas emissions by 75 percent.145

Coolers introduced by PepsiCo, Red Bull, Heineken, and Ben & Jerry’s are based on hydrocarbons

including propane (R-290) or isobutane (R-600a). These companies combined have more than

600,000 units in use today and have seen energy efficiency improvements from 10 to 20 percent or

even greater.146

Fifteen car companies, including General Motors, Ford, and Chrysler, are moving forward with HFO-

1234yf,147 a new low-GWP refrigerant for personal vehicle air conditioners that has a GWP 99.9

percent lower than the HFC it replaces.148 An estimated 1 million cars on the road worldwide already

use this low-GWP refrigerant.149 This number is expected to grow to nearly 3 million by the end of

2014.150

However, some low-GWP replacements have relatively high upfront costs, require the replacement of

old equipment, or require equipment redesign.151 Thus, there is little reason to believe that the U.S.

market will rapidly move to these alternatives without new rules or other incentives.

The United States (with Canada and Mexico) has advocated for the past several years for an amendment

to the Montreal Protocol that would phase down the use of HFCs globally. Agreement was finally

reached in early November at the 27th Meeting of the Parties to the Montreal Protocol to negotiate the

terms of this amendment. These negotiations will be conducted during 2016 through a series of

additional meetings, with the HFC amendment to be adopted in November 2016.152 However, to help

reduce the use of HFCs domestically pending this amendment, EPA has started to implement measures

that address high-GWP HFC use in personal vehicles and in pickups, vans, and combination tractors.153 In

February 2015, EPA finalized rules through the Significant New Alternatives Program (SNAP) program to

approve low-GWP alternatives154 and in July 2015, EPA finalized rules to move some higher-GWP HFCs

out of the market for various applications.155 In October 2015, EPA proposed a rule that will help

capture, reclaim and recycle more HFCs from existing equipment to reduce the amount of new HFCs

produced.156

Opportunities exist to make HFC reductions beyond those finalized by EPA to date. While a global

phasedown, through the Montreal Protocol, would be much more effective than a few individual

countries taking action alone, EPA can continue using the SNAP program to jump start the removal of

20

high-GWP HFCs from the market when low-GWP alternatives become available. However, it will be

important for EPA to ensure that new alternatives are both safe and efficient.

III. How the United States Can Reach Its INDC Target

As demonstrated in the previous sections, opportunities are emerging across the economy in multiple

sectors to harness fuels, technologies, and processes in moving toward a low-carbon economy. The

actions taken to date by the Obama Administration under the Climate Action Plan seize many of those

opportunities and set an important foundation for meeting its target of reducing emissions 26–28

percent below 2005 levels by 2025, as outlined in its Intended Nationally Determined Contribution

(INDC).

In May 2015, WRI published Delivering on the U.S. Climate Commitment: A 10-Point Plan Toward A Low-

Carbon Future. This study demonstrates that the United States can meet, and even exceed, its INDC

target with a broad policy portfolio using existing federal laws combined with actions by states. This

would include expanding and strengthening some current and proposed policies and standards and

taking actions on emission sources that are not yet addressed. Since we completed our analysis, the

Administration has already started to move on some of the additional actions we identified as necessary

for the US to meet its INDC target, including taking steps toward improving the efficiency of medium-

and heavy-duty trucks, aircraft, and rooftop air conditioning units.

Figure 1 presents emissions projections for three low-carbon pathways that could reduce U.S. emissions

by 26–30 percent below 2005 levels by 2025 and 34–38 percent by 2030. Delivering on the U.S. Climate

Commitment outlines specific steps federal agencies and state governments can take to achieve these

reductions, recognizing that other pathways could reach those targets as well by applying different

policy portfolios. Notably, our pathways do not include steps to reduce emissions and increase

sequestration from the agriculture and forestry sectors. However, in April 2015, the Administration

announced an initiative titled Building Blocks for Climate Smart Agriculture & Forestry.157 USDA expects

this comprehensive set of voluntary programs and initiatives to reduce net emissions and enhance

carbon sequestration by over 120 million metric tons of CO2 equivalent per year by 2025. The

opportunities in agriculture and forestry reinforce the notion that there are multiple pathways to

achieve the U.S. INDC target.

Figure 1. Net U.S. Greenhouse Emissions: Reference Case and Low-Carbon Pathways Using Existing

21

Federal Authorities and Additional State Action

Figure 1 depicts net GHG emissions under three low-carbon pathways we modeled in our analysis that

could be pursued using existing federal laws and additional state action. The “Core Ambition” pathway

reflects the EPA’s Clean Power Plan (CPP), in addition to emission abatement opportunities across other

sectors of the economy. (The modeling is based on the CPP as proposed, however, the reductions

projected in 2025for the final rule are nearly the same.) “Power Sector Push” builds on Core Ambition

by assuming that states and utilities go beyond the CPP to take advantage of cost-effective energy

efficiency resources and continued decreases in renewable energy costs. “Targeted Sector Push”

assumes that the CPP, but pushes the envelope in a few key areas outside the power sector to achieve

economy-wide reductions similar to “Power Sector Push”. Both of these pathways were designed to

achieve very similar levels of emission reductions, illustrating alternative ways to go beyond a 26

percent reduction across the economy, either through increased action in the power sector or outside

the power sector. The shaded area between the pathways indicates that reductions anywhere in this

range are possible given mixtures of policies that blend these three pathways. The full report contains

all the details and assumptions underlying these pathways and the Reference Case projection, and the

modeling approaches used.

22

IV. International Action

A. Intended Nationally Determined Contributions (INDCs) and National Climate Actions

The leadership shown by the United States has paid substantial dividends internationally. In the lead-up

to the Paris climate summit and the 2015 international climate agreement, we have witnessed an

unprecedented level of commitment to climate action by a wide array of countries, both developing and

developed. As of November 30, 2015, 183 countries, including all major economies, have submitted

national climate plans for the 2015 climate agreement.158 These plans, known as Intended Nationally

Determined Contributions (INDCs), are from countries representing more than 95 percent of global

greenhouse gas (GHG) emissions.159 This unprecedented effort indicates countries’ increased

seriousness in addressing climate change.160

The recently released UNFCCC INDC synthesis report finds that these INDCs represent a much greater

breadth of countries than those submitted in 2010,161 when only 100 countries submitted plans in

association with the Copenhagen Accord and the Cancun Agreement.162 We are also witnessing an

extraordinary effort from developing countries in the lead up to the Paris negotiations. In 2010, only 33

developing nations announced a national climate plan.163 As of November 30, 2015, 142 developing

countries – including 46 least developed countries – have submitted an INDC, through which they

outline their plans to mitigate emissions and adapt to a changing climate. Only two least developed

countries (LDCs) have yet to submit an INDC.164

The effect of these plans on climate policies will be considerable. Of the plans submitted, those from at

least 123INDCs include a greenhouse gas emissions target, usually expressed as a percent reduction by a

certain year. By contrast, of the countries with pledges adopted for 2020 targets in association with the

Copenhagen Accord and the Cancun Agreement, only 61 included greenhouse gas emissions targets, less

than half of those with such targets in the current INDCs.165

Countries are also using their INDCs to outline significant policies and actions that support the

deployment of clean energy and help countries adapt to the effects of climate change. In the plans

submitted, more than 100 INDCs include plans to scale up clean energy between 2020 and 2030, as they

look for ways to limit greenhouse gas emissions while sustaining economic growth, boosting energy

security and providing energy access to the billions of people who lack it now.166 More than half of these

plans include specific targets for increasing renewable energy supply.167

In addition to addressing mitigation, the plans from at least 135 INDCs include adaptation,168 describing

activities and goals in vulnerable sectors like water, agriculture and human health. Most countries

clearly identify existing gaps, barriers and needs associated with adapting to their local climate change

impacts, which begins to outline a roadmap for global efforts to build capacity, develop and share

technology, and scale up adaptation finance.169

23

As a whole, INDCs not only address climate change, but also address domestic goals such as sustainable

economic growth and poverty reduction. Importantly, the INDCs signal a new phase of climate policy, in

which climate action is strongly rooted in domestic policies and national development and economic

agendas and aligned with country priorities.170

1. Developing Countries’ Plans and Actions

The climate actions of major developing countries are particularly worth noting. Last year’s U.S.-China

Joint Announcement on Climate Change was an historic agreement that included unprecedented actions

by China. China committed to reach a peak in its carbon dioxide emissions around 2030 and make best

efforts to peak earlier, and to increase the non-fossil fuel share of its energy use to around 20 percent by

2030.171 China’s INDC, submitted in June 2015 for the Paris climate agreement, formalized these targets

and also set additional targets to reduce the carbon intensity (carbon emitted per unit of GDP) of its

economy by 60 to 65 percent from 2005 levels by 2030 and to increase its forest stock by around 4.5

billion cubic meters.172 In addition to national targets, eleven cities and provinces from across China

committed to reach a peak in their carbon emissions before the national goal to peak around 2030.173

This group comprises a quarter of China’s urban carbon emissions, roughly equivalent to the total

annual carbon emissions of Japan or Brazil.174

China has made significant progress in decoupling emissions from economic growth in recent years and

is on track to exceed the carbon intensity and energy intensity targets in its 12th Five Year Plan.175 These

are key steps to achieving China’s commitment to reduce its carbon intensity by 40 to 45 percent from

2005 levels by 2020.176

China’s 2030 targets are in line with even stronger efforts. A 2014 study by MIT and China’s Tsinghua

University found that a scenario with emissions leveling off between 2025 and 2035 and slowly declining

after that involves stronger measures well beyond current policies, including a rising price on carbon.177

Stronger steps will also be needed to achieve the non-fossil target. China will need to install 800-1,000

gigawatts (GW) of non-fossil fuel electricity generation capacity to achieve its 2030 non-fossil energy

target, greater than its current coal-fired capacity and almost the total current electricity generation

capacity of the United States.178

Expert projections179 of a peak in China’s carbon emissions and an increased share of non-fossil energy

are supported by several major building blocks: scaling up non-fossil energy, limiting coal use,180

improving energy efficiency, placing a price on carbon, and rebalancing the economy from heavy

industry toward services.181 China is already taking significant action in each of these areas.

China led the world with nearly a third of global investment in renewable energy in 2014,182 is the world

leader in installed wind power capacity,183 and has set targets to roughly double its 2014 wind capacity

to 200 gigawatts and more than triple its 2014 solar capacity to 100 gigawatts by 2020.184 China has

banned new coal plants in three key industrial regions185 and many provinces have targets to reduce

24

coal use.186 China has been strengthening and expanding policies to increase energy efficiency across its

economy, including targets for the efficiency of coal plants,187 energy-saving targets for industrial

enterprises,188 building energy codes,189 and fuel economy standards.190 President Xi Jinping recently

announced that in 2017 China will launch a national emissions trading system,191 which has the potential

to be a powerful instrument to reduce emissions over time.192 Finally, China is seeking to shift away

from its old growth model driven by investment in energy-intensive industry toward a new model driven

by consumption, services, and advanced manufacturing,193 which should have an emissions reduction

benefit.194

China is working on including additional steps in its upcoming 13th Five Year Plan, to be released early

next year.195 Signs of a recent decline in China’s coal use196 and other trends have led some experts to

predict that China’s coal use may have already reached its structural peak (controlling for cyclical

factors)197 and that China’s emissions will likely peak before 2030, consistent with the government’s

stated aim to make best efforts to peak early.198

Other major developing countries have also taken important steps forward. In its INDC, Brazil has set a

target of reducing emissions by 37 percent below 2005 levels by 2025,199 becoming the first major

developing country to commit to an absolute reduction of emissions from a base year. Brazil also plans

to increase the share of renewables (other than hydropower) in the power supply to at least 23 percent

by 2030. This will increase Brazil’s renewable electrical capacity (excluding hydropower) by an estimated

48 gigawatts, more than quadrupling 2012 levels.200 The country also has set a target to achieve zero

illegal deforestation by 2030 in the Brazilian Amazon. Over the past decade, the rate of deforestation in

the Brazilian Amazon has already dropped by 70 percent compared with the previous decade, keeping

3.2 billion metric tons of carbon dioxide (CO2) emissions out of the atmosphere.201 This is equivalent to

taking all U.S cars off the road for three years.202

India has set goals to substantially increase its renewable energy capacity to 175 gigawatts by 2020,

including increasing its solar capacity to 100 gigawatts—a twentyfold increase from current levels of 4

gigawatts—and increasing its wind power capacity to 60 gigawatts.203 The solar target is more than half

the total global installed capacity of 181 gigawatts of solar energy in 2014.204 In its INDC, India builds on

this targets by committing to increase its non-fossil fuel power sector capacity to 40 percent by 2030.

India’s INDC also commits to reducing the greenhouse gas intensity of its economy (greenhouse gases

per unit of GDP) by 33-35% below 2005 levels by 2030. India will also create an additional carbon sink of

2.5 to 3 billion tons of carbon dioxide through additional tree cover.205

Additional major developing countries have submitted INDCs that indicate a peak date for the absolute

level of emissions. Mexico was the first developing country to release its INDC and plans to reduce its

greenhouse gas emissions by 22 percent and its black carbon (soot) by 51 percent by 2030 relative to

BAU levels.206 The INDC indicates that the policy is expected to lead to a peak in emissions by 2026.

South Africa joins China and Mexico in stating intended peaking years for emissions. South Africa’s

INDC provides a target to peak national greenhouse gas emissions between 2020 and 2025 and decline

in absolute terms beginning no later than 2035.

25

2. Effect of INDCs on Global Temperature

Several recent studies have shown that the INDCs submitted will make a significant difference in

reducing global emissions in comparison to current policy trajectories. All of the studies find that the

INDCs collectively reduce global emissions relative to the current trajectory, though additional effort will

be needed to limit the global temperature increase to a rise of less than 2 degrees Celsius (3.6 degrees

F) above pre-industrial temperatures, the globally agreed goal for limiting climate change.207

The International Energy Agency’s Energy and Climate Change Report208 concludes that full

implementation of INDCs would contribute to 4-8 gigatons (GtCO2e) of greenhouse gas emissions

reductions by 2030. The report estimates that the path set by the INDCs would be consistent with an

average global temperature increase of around 2.7 degrees Celsius by 2100. That contrasts with the

Agency’s projections of an almost 4 degrees Celsius temperature increase by 2100 given business as

usual (BAU) policies.209

The Synthesis Report of the INDCs conducted by the UNFCCC estimates that the implementation of

INDCs would result in emissions in 2025 that are 2.8 gigatons (and up to 5.5 gigatons) of greenhouse gas

emissions (GtCO2e) lower than current policy trajectories and emissions in 2030 that are 3.6 gigatons

(and up to 7.5 gigatons) lower. The synthesis report does not present the effect of INDCs on global

temperature.210

The reports come to a similar conclusion that the implementation of INDCs would contribute to

significant reductions of global greenhouse gas emissions (approximately 3-8 GtCO2e in 2030). Although

the collective reductions of the INDC emissions targets are not yet sufficient to achieve the 2 degrees

Celsius goal, progress has already been made. The INDCs represent approximately one third of the

emissions reductions needed to meet the 2 degrees Celsius goal relative to current trajectories, and half

of the reductions needed relative to the business as usual policies in place in 2010.211 While more needs

to be done in the coming years, the INDCs are an important first step in transitioning to a low-carbon

economy and limiting global temperature increase. This will assist in avoiding some of the most costly

impacts in the United States and in other countries.

Further action beyond the INDCs is in our economic interest, according to the New Climate Economy, in

its 2015 report, Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate. It

identified actions in 10 key areas that can drive economic growth and development and achieve as much

as 96% of the greenhouse gas emissions reductions needed by 2030 to keep global warming under

2°C.212 These include investing in low-carbon cities, which could save urban areas around US$17 trillion

globally by 2050 and reduce emissions by 3.7 Gt CO2e and investing in energy efficiency measures, which

could boost cumulative global economic output by US$18 trillion by 2035.

26

B. International Agreement

The leadership role played by the United States has helped to catalyze not only broad-based action by

other countries, but also the momentum toward an international agreement that achieves a key set of

aims for the United States.

First, and most important, the agreement is applicable to all countries. The Paris agreement will build on

and implement the existing United Nations Framework Convention on Climate Change (UNFCCC), which

was ratified by the Senate in 1992, and will mark a critical step forward by involving action to reduce

emissions by all countries, both developed and developing.

The universality of the agreement is exactly what the United States has been seeking for many years in

the international climate negotiations and should be viewed as a major success. It will be an agreement

with a structure that removes previous question marks about action by China and other countries and

puts in place clear pathways for action by all countries. This shift to a universal system is also the result

of a process in the negotiations to generate national climate plans, the INDCs, at the national level in

accordance with their national circumstances.213 This sets a strong foundation for countries to achieve

what they have set out in their INDCs.

Second, the Paris agreement is a critical opportunity to enhance the existing system of transparency and

accountability to enable greater clarity and enhance trust about whether and how countries are fulfilling

their INDCs. Following the UNFCCC Conference of Parties (COP) in Copenhagen in 2009 and the

Conference of Parties in Cancun in 2010, all countries are required to track and report their emissions

through a system referred to as Measurement, Reporting and Verification (MRV), with some differences

for developed and developing countries in timelines and exact reporting requirements.214 The Paris

agreement can strengthen this system and ensure that developed and developing converge to the same

MRV requirements over time (including through the use of capacity building support for developing

countries to implement the requirements).

A robust system of transparency is very much in line with the values of openness and accountability that

are so fundamental and deeply imbedded in the United States. It is essential to making sure that other

countries are carrying out what they have said they will do. The MRV system also offers an opportunity

to identify challenges that developing countries with limited capabilities may be facing and to work with

them to address those barriers.

Third, it is vital that the Paris agreement is durable, designed not only for circumstances as they exist in

2015, but also for years to come. In part, the agreement must be flexible enough to accommodate

evolving national circumstances, particularly as countries’ capabilities continue to grow. Beyond that,

the agreement must also ensure that all countries continue moving forward over time, regularly

returning to review, revisit and update their national climate plans. This is essential to making this

agreement universal over the long-term, ensuring that countries across the board continue to move

forward in a regular and timely way, while also providing an opportunity to consider whether countries

are doing their part to take adequate action. Establishing a long-term global goal for action to reduce

27

emissions can also help to ensure that all countries, not just some, are expected to move toward a

common objective over time.

Fourth, the Paris agreement is an opportunity to effectively expand the scope of finance and investment

needed to meet this challenge, bringing many new actors into the mix. Public funding remains essential,

particularly to address the serious impacts of climate change on the poorest countries. But the

substantial investment needed to shift our economies to low-carbon and climate resilient pathways also

requires mobilizing and shifting the broader private sector financing that is so necessary to making

progress.

Moreover, developing countries with greater capabilities are increasingly stepping up to play a

meaningful role in climate finance. Chinese President Xi’s recent commitment in the Joint Presidential

Statement with President Obama that China would provide more than $3 billion in climate finance was a

game changer.215 Some developing countries have also now contributed to the Green Climate Fund, a

central international funding mechanism.216 The Paris agreement can reflect this shift and the key role of

finance from developing countries that are ready to provide it.

Acting together with these other countries and private sectors investors, U.S. engagement to mobilize

climate finance is a sensible investment. Especially by enabling vulnerable countries to build resilience to

changing weather patterns, sea level rise, and extreme weather events, international climate change

investments can help counter security threats that otherwise would have to be confronted with more

costly interventions. The impacts of climate change must also be addressed to avoid undermining or

reversing development gains in poor countries, especially those in vulnerable regions like Sub-Saharan

Africa. An assessment by the World Bank illustrates how climate change increasingly threatens health

and livelihoods of vulnerable populations, magnifying existing challenges to poverty alleviation.217

And, fifth, the Paris agreement can help catalyze action to address the impacts of climate change that

are already being felt, especially in the most vulnerable and poorest countries. This is a challenge that

affects us all – whether it is increased water scarcity and drought, vulnerable coastal areas facing sea-

level rise, or growing risks to agricultural productivity. All countries need to work together to address

these challenges, and the Paris agreement is a critical opportunity to catalyze collective action to build

resilience to climate impacts. The United States has always stood with and supported the most

vulnerable and poorest countries in tackling their challenges and should continue to do so today.

Meanwhile, there is more that will happen in Paris beyond the bounds of the international agreement

itself. A major platform for actors other than national governments – including businesses and cities

and states – will highlight the many actions and initiatives that are already underway to advance a low-

carbon and climate resilient economy. Effective action on climate change cannot rest only on the actions

of governments or agreements among them – it will depend on everyone playing a part.

V. Conclusion

The United States has the opportunity in the coming years to lay the foundation for a path to economic

growth that delivers significant climate benefits. The key drivers of economic growth—including more

28

efficient use of energy and natural resources, smart infrastructure investments, and technological

innovation—can also lead to a low-carbon future. By bringing a spirit of competition, ingenuity, and

innovation to the climate challenge, the United States can be a leader in delivering the improvements in

energy efficiency, the cleaner fuels, and the new technologies and processes that can lower emissions

and create net economic benefits. With more than 50 years’ experience in addressing environmental

problems, the United States has demonstrated that environmental protection is compatible with

economic growth, and environmental policies have delivered huge benefits to Americans.

The U.S. emissions reduction target of reducing emissions by 26 to 28 percent below 2005 levels by

2025 is both ambitious and achievable. Use of existing federal laws combined with actions by the states

can help accelerate recent market and technology trends in renewable energy, energy efficiency,

alternative vehicles, and many other areas in order to meet or beat that target.

It is very much in the national interest of the United States to play a leading role in addressing climate

change. All nations will need to take ambitious action and do their share, since no nation is immune to

the impacts of climate change and no nation can meet the challenge alone. U.S. leadership has already

paid substantial dividends as we witness the wide variety of countries coming forward with their

national climate plans and as we see the development of an international climate agreement that is

universal, transparent, durable and effective.

The United States has always provided leadership when the world faces big challenges, and by acting at

home, we can work with other countries to achieve an effective international agreement in which all

countries act.

Thank you for the opportunity to testify before the Committee, and I look forward to answering any

questions.

1 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” Accessible at: <http://newclimateeconomy.report/>. 2 N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States." World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 3 UNFCCC, 2015, “INDCs as communicated by Parties”, accessible at http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx. 4 See <http://sciencebasedtargets.org/companies-taking-action> 5 Fact Sheet: White House Announces Commitments to the American Business Act on Climate Pledge.” October 19, 2015. Accessed November 13, 2015, <https://www.whitehouse.gov/the-press-office/2015/10/19/fact-sheet-white-house-announces-commitments-american-business-act>

29

6 “Major U.S. banks call for leadership in addressing climate change.” September 28, 2015. Ceres. Accessed November 13, 2015, <http://www.ceres.org/press/press-releases/major-u.s.-banks-call-for-leadership-in-addressing-climate-change> 7 Carbon Disclosure Project, 2015, “Putting a Price on Risk: Carbon Pricing in the Corporate World,” Available at <https://www.cdp.net/CDPResults/carbon-pricing-in-the-corporate-world.pdf> 8 Available at: <http://www2.epa.gov/cira>. 9 CNA Military Advisory Board, “National Security and the Accelerating Risks of Climate Change.” Alexandria, VA: CNA Corporation, 2014. 10 Global Commission on the Economy and Climate, 2014, “Better Growth, Better Climate: The New Climate Economy Report,” available at http://2014.newclimateeconomy.report/wp-content/uploads/2014/08/NCE-Global-Report_web.pdf. 11 U.S. Environmental Protection Agency, “Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants”, RIA, Table ES-10, p. ES-23. 12 UNFCCC, 2015, “INDCs as communicated by Parties”, accessible at http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx. 13 White House Office of the Press Secretary, “FACT SHEET: U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation” (November 11, 2014) http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c. “Fact Sheet: The United States and China Issue Joint Presidential Statement” (September 25, 2015). https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-united-states-and-china-issue-joint-presidential-statement 14 IEA, 2015, “Energy and Climate Change”, accessible at https://www.iea.org/media/news/WEO_INDC_Paper_Final_WEB.PDF. 15 IEA, 2015, “Energy Technology Perspectives”, accessible at https://www.iea.org/etp/. 16 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” Accessible at: <http://newclimateeconomy.report/>. 17 P. Hibbard, A. Okie, S. Tierney, and P. Darling, 2015, “The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States,” Analysis Group. Available at: http://www.analysisgroup.com/uploadedfiles/content/insights/publishing/analysis_group_rggi_report_july_2015.pdf. 18 M. Metayer, C. Breyer, and H. Fell, 2015, “The projections for the future and quality in the past of the World Energy Outlook for solar PV and other renewable energy technologies.” Energy Watch Group. Available at: http://energywatchgroup.org/wp-content/uploads/2015/09/EWG_WEO-Study_2015.pdf. 19 Based on projections of IEA World Energy Outlooks in Reference Scenarios of WEO 2007 and New Policies Scenarios in WEO 2013. World Energy Outlook 2007 available at http://www.worldenergyoutlook.org/media/weowebsite/2008-1994/weo_2007.pdf. World Energy Outlook 2013 available at: http://www.worldenergyoutlook.org/weo2013/. 20 S. Dechert, 2015, “Greenpeace Aces Renewable Energy Forecasts. Surprised?” Clean Technica. Available at: http://cleantechnica.com/2015/03/30/greenpeace-aces-installed-renewable-forecasts-surprised/. 21 U.S. Department of Energy, 2015, “Revolution… Now: The Future Arrives for Five Clean Energy Technologies – 2015 Update”, accessible at http://www.energy.gov/sites/prod/files/2015/11/f27/Revolution-Now-11132015.pdf 22 P. Bodnar. National Security Council, and D. Turk, U.S. Department of Energy, 2015, “Announcing, ‘Mission Innovation,’” accessible at: https://www.whitehouse.gov/blog/2015/11/29/announcing-mission-innovation 23 Breakthrough Energy Coalition, 2015, “Introducing the Breakthrough Energy Coalition,” accessible at http://www.breakthroughenergycoalition.com/en/index.html 24 The Solar Foundation, 2015, “Solar Industry Creating Jobs Nearly 20 Times Faster than Overall U.S. Economy.” Available at: http://www.thesolarfoundation.org/press-release-solar-industry-creating-jobs-nearly-20-times-faster-than-overall-u-s-economy/ 25 Synapse Energy, Labor Network for Sustainability, 350.org, 2015, “The Clean Energy Future: Protecting the Climate, Creating Jobs, Saving Money.” Available at: http://synapse-energy.com/sites/default/files/Clean-Energy-Future-15-054.pdf. 26 D. Lashof, 2015, “Our Clean Energy Economy,” NextGen Climate America. Available at: http://nextgenamerica.org/blog/our-clean-energy-economy/

30

27 Global Commission on the Economy and Climate, 2015, “Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate,” available at http://2015.newclimateeconomy.report/wp-content/uploads/2014/08/NCE-2015_Seizing-the-Global-Opportunity_web.pdf. 28 Global Commission on the Economy and Climate, 2015, “Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate,” available at http://2015.newclimateeconomy.report/wp-content/uploads/2014/08/NCE-2015_Seizing-the-Global-Opportunity_web.pdf. 29 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” (Chapter 5, Economics of Change, p.3.) Accessible at: <http://newclimateeconomy.report/>. 30 See the literature review and original research in USEPA, National Center for Environmental Economics. 2012. Retrospective Study of the Costs of EPA Regulations: An Interim Report of Five Case Studies. Accessible at: <http://yosemite.epa.gov/sab/sabproduct.nsf/368203f97a15308a852574ba005bbd01/3A2CA322F56386FA852577BD0068C654/$File/Retrospective+Cost+Study+3-30-12.pdf>. See also: Ruth Greenspan Bell, For EPA Regulations, Cost Predictions Are Overstated, November 17, 2010. Available at: <http://www.wri.org/blog/2010/11/epa-regulations-cost-predictions-are-overstated>. 31 U.S. Energy Information Administration. Annual Energy Outlook2014. 32 See <http://sciencebasedtargets.org/companies-taking-action> 33 Fact Sheet: White House Announces Commitments to the American Business Act on Climate Pledge.” October 19, 2015. Accessed November 13, 2015, <https://www.whitehouse.gov/the-press-office/2015/10/19/fact-sheet-white-house-announces-commitments-american-business-act> 34 Major U.S. banks call for leadership in addressing climate change.” September 28, 2015. Ceres. Accessed November 13, 2015, <http://www.ceres.org/press/press-releases/major-u.s.-banks-call-for-leadership-in-addressing-climate-change> 35 Carbon Disclosure Project, 2015, “Putting a Price on Risk: Carbon Pricing in the Corporate World,” Available at <https://www.cdp.net/CDPResults/carbon-pricing-in-the-corporate-world.pdf> 36 U.S. Energy Information Administration, “Analysis of the Clean Power Plan”, 2015, Table 3, p. 24. Available at: < http://www.eia.gov/analysis/requests/powerplants/cleanplan/>. 37 U.S. Environmental Protection Agency, “Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstructed Power Plants”, RIA, Table ES-10, p. ES-23. 38 See Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Available at: < https://unfccc.int/science/workstreams/cooperation_with_the_ipcc/items/8732.php>. 39 WRI. 2014. “CAIT 2.0, 2014, Climate Analysis Indicators Tool: WRI’s Climate Data Explorer.” Washington, DC: World Resources Institute. Accessible at: <http://cait2.wri.org>. International Energy Agency. 2015. “Global energy-related emissions of carbon dioxide stalled in 2014.” Accessible at: <http://www.iea.org/newsroomandevents/news/2015/march/global-energy-related-emissions-of-carbon-dioxide-stalled-in-2014.html>. U.S. Environmental Protection Agency. 2012. “Global Anthropogenic Non-CO2 Greenhouse Gas Emissions: 1990-2030.” Accessible at: <http://www.epa.gov/climatechange/EPAactivities/economics/nonco2projections.html>. Between 2005 and 2011, global GHG emissions increased by roughly 13 percent and it is unclear what trend emissions will follow in the future. While preliminary data from the International Energy Agency suggests that energy-related CO2 emissions stalled in 2014 (the first time in 40 years a halt or reduction in emissions was not tied to an economic downturn), non-CO2 GHG emissions will continue to rise nearly 44 percent above 2005 levels by 2030, according to data from the U.S. Environmental Protection Agency. In 2011, non-CO2 emissions accounted for about 27 percent of global GHG emissions. 40 M. Burke, S. Hsian, E. Miguel, “Global non-linear effect of temperature on economic production,” Nature. Available at: https://dl.dropboxusercontent.com/u/3011470/Publications/nature15725_withSI.pdf. 41 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” Accessible at: <http://newclimateeconomy.report/>. 42 T. Litman, 2015, “Analysis of Public Policies that Unintentionally Encourage and Subsidize Urban Sprawl.” New Climate Economy and Victoria Transport Policy Institute. Available at: http://static.newclimateeconomy.report/wp-content/uploads/2015/03/public-policies-encourage-sprawl-nce-report.pdf

31

43 A. Doukas, 2015, “G20 Subsidies to oil, gas, and coal production: United States,” Overseas Development Institute and Oil Change International. Available at: http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9979.pdf 44 Available at: <http://www2.epa.gov/cira>. 45 National Oceanic and Atmospheric Administration, National Climatic Data Center. 2014. “Global Analysis- Annual 2014.” Accessible at: <http://www.ncdc.noaa.gov/sotc/global/>. 46 Forbes Tompkins and Christina DeConcini. 2015. “2014: A Year of Temperature Records and Landmark Climate Findings.” Accessible at: <http://www.wri.org/sites/default/files/2014_Temperature_Records_and_Landmark_Climate_Findings_fact_sheet.pdf>. N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper. Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 47 F. Tompkins and C. DeConcini. 2015. “2014: A Year of Temperature Records and Landmark Climate Findings.” Accessible at: <http://www.wri.org/sites/default/files/2014_Temperature_Records_and_Landmark_Climate_Findings_fact_sheet.pdf>. N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper. Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 48 National Oceanic and Atmospheric Administration, National Climate Data Center. “Billion-Dollar Weather and Climate Disasters: Overview.” Accessible at: <http://www.ncdc.noaa.gov/billions/>. Munich RE. 2014. “Loss Events Worldwide1980–2013.” Accessible at: <http://www.munichre.com/site/wrap/get/documents_E-736590296/mram/assetpool.munichreamerica.wrap/PDF/2013/1980_2013_events.pdf>. 49 NOAA, 2014, “Billion-Dollar Weather and Climate Disasters: Table of Events” Available at: https://www.ncdc.noaa.gov/billions/events 50 Munich RE. 2014. “Loss Events Worldwide1980–2013.” Accessible at: <http://www.munichre.com/site/wrap/get/documents_E-736590296/mram/assetpool.munichreamerica.wrap/PDF/2013/1980_2013_events.pdf>. 51 A. Benfield. “2014 Annual Global Climate and Catastrophe Report: Impact Forecasting.” Accessible at: <http://thoughtleadership.aonbenfield.com/Documents/20150113_ab_if_annual_climate_catastrophe_report.pdf>. 52 Risky Business, 2015. Available at: http://riskybusiness.org/. 53 CNA Military Advisory Board, “National Security and the Accelerating Risks of Climate Change.” Alexandria, VA: CNA Corporation, 2014. 54 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” Accessible at: <http://newclimateeconomy.report/>. 55 U.S. Department of Energy. 2014. “Photovoltaic System Pricing Trends: Historical, Recent, and Near-Term Projections.” SunShot. Accessible at: <http://www.nrel.gov/docs/fy14osti/62558.pdf>. R. Wiser and M. Bolinger. 2014. “2013 Wind Technologies Market Report.” Lawrence Berkeley National Laboratory. Accessible at: <http://emp.lbl.gov/sites/all/files/2013_Wind_Technologies_Market_Report_Final3.pdf>. 56 Office of the Governor, Economic Development and Tourism, "The Texas Renewable Energy Industry", 2014 Available at: <http://gov.texas.gov/files/ecodev/Renewable_Energy.pdf>. 57 U.S. Department of Energy. 2014. “Saving Energy and Money with Appliance and Equipment Standards in the United States.” (chapter 2) Accessible at: <http://energy.gov/sites/prod/files/2014/05/f16/Saving%20Energy%20and%20Money2.pdf>. For state-specific examples of consumer savings due to efficiency programs, see N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper. Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 58 Since 2000 the United States has primarily built lower carbon resources, constructing 249 gigawatts (GW) of gas, along with 57 GW of wind, and only 18 GW of coal. This includes new capacity built for the electric utility sector and independent power producers between 2000 and 2012. See U.S. Energy Information Administration. “Form EIA-860 2012.” Accessible at: <http://www.eia.gov/electricity/data/eia860/>. U.S. Energy Information

32

Administration. 2014. Monthly Energy Review. (June) Accessible at: <http://www.eia.gov/totalenergy/data/monthly/pdf/sec12_9.pdf>. 59 N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper. Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 60 N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper (p. 72). Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 61 The Global Commission on the Economy and Climate. 2014. “Better Growth, Better Climate.” Accessible at: <http://newclimateeconomy.report/>. 62 U.S. Energy Information Administration, “Table 12.6 Carbon Dioxide Emissions From Energy Consumption: Electric Power Sector,” Monthly Energy Review, August 2014, accessible at http://www.eia.gov/totalenergy/data/monthly/pdf/sec12_9.pdf. 63 Shakeb Afsah and Kendyl Salcito, “Demand Reduction Slashes US CO2 Emissions in 2012,” CO2 Scorecard, May 2013, accessible at: http://co2scorecard.org/home/researchitem/27. 64 Since 2000 the United States has primarily built lower carbon resources, constructing 249 gigawatts (GW) of gas, along with 57 GW of wind, and only 18 GW of coal. Includes new capacity built for the electric utility sector and independent power producers between 2000 and 2012. See U.S. Energy Information Administration, Form EIA-860 2012, accessible at http://www.eia.gov/electricity/data/eia860/. 65 U.S. Energy Information Administration. “Table 6.7.A. Capacity Factors for Utility Scale Generators Primarily Using Fossil Fuels, January 20082013-2014March 2015,” Electric Power Monthly, May 2015, accessible at http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_07_a. 66 Power sector data from 2012 for capacity, generation, and CO2 emissions by technology type from Annual Energy Outlook 2014 Reference Case detailed outputs provided by the U.S. Energy Information Administration. 67U.S. Energy Information Administration, “Table 12.6 Carbon Dioxide Emissions From Energy Consumption: Electric Power Sector,” Monthly Energy Review, August 2014, accessible at http://www.eia.gov/totalenergy/data/monthly/pdf/sec12_9.pdf. 68 International Energy Agency, “World Energy Outlook 2015.” 2015. OECD/IEA: Paris. 69 Bob Fagan, Patrick Luckow, David White, and Rachel Wilson, 2013,“The Net Benefits of Increased Wind Power in PJM,” Synapse Energy Economics, Inc., May, accessible at http://www.synapse-energy.com/Downloads/SynapseReport.2013-05.EFC.Increased-Wind-Power-in-PJM.12-062.pdf; Bob Fagan, Max Chang, Patrick Knight, Melissa Schultz, Tyler Comings, Ezra Hausman, and Rachel Wilson, 2012, “The Potential Rate Effects of Wind Energy and Transmission in the Midwest ISO Region,” Synapse Energy Economics, Inc., May, accessible at http://cleanenergytransmission.org/wp-content/uploads/2012/05/Full-Report-The-Potential-Rate-Effects-of-Wind-Energy-and-Transmission-in-the-Midwest-ISO-Region.pdf; D. Lew, and G. Brinkman, 2013, “The Western Wind and Solar Integration Study Phase 2: Executive Summary,” National Renewable Energy Laboratory, September, accessible at http://www.nrel.gov/docs/fy13osti/58798.pdf;

Ryor and Tawney, 2014, “Shifting to Renewable Energy Can Save U.S. Consumers Money.” 70 Grand River Dam Authority, September 2014, “With potential to save customers $50 million over the project’s lifetime … GRDA signs 100 MW renewable energy purchase agreement with Apex Clean Energy,” http://www.grda.com/with-potential-to-save-customers-50-million-over-the-projects-lifetime-grda-signs-100-mw-renewable-energy-purchase-agreement-with-apex-clean-energy/. 71 DTE Energy’s Renewable Energy Plan Surcharge (REPS) recovers the cost of incorporating renewable sources in DTE Energy’s generation mix. Improvements in technology for wind and solar as well as federal production tax credits have allowed for a considerable decrease of this monthly surcharge, lowering rates by approximately 2.5 percent. See DTE Energy, “Residential Electric Rates,” accessible at http://bit.ly/1nDq0yG; and DTE Energy, “DTE Energy to Lower Rates for Electric Customers,” December 20, 2013, accessible at https://dteenergy.mediaroom.com/2013-12-20-DTE-Energy-to-lower-rates-for-electric-customers. 72 Eric Wesoff, “Austin Energy Switches From SunEdison to Recurrent for 5-Cent Solar,” GreenTech Media, May 2014, accessible at http://www.greentechmedia.com/articles/read/Austin-Energy-Switches-From-SunEdison-to-Recurrent-For-5-Cent-Solar.

33

73 MidAmerican Energy, “MidAmericna Energy Announces $1.9 Billion Investment in Additional Wind Generation Capacity,” May 8 2013, accessible at http://www.midamericanenergy.com/wind_news_article.aspx?id=634. 74 For example, PJM, National Renewable Energy Laboratory (NREL) for the Western United States, and the state of Michigan have all found that 30-35 percent of electricity could be generated using variable renewable resources with minimal cost. See GE Energy Consulting, “PJM Renewable Integration Study Executive Summary Report,” Revision 05, 2014, accessible at http://pjm.com/~/media/committees-groups/task-forces/irtf/postings/pris-executive-summary.ashx; GE Energy, Prepared for National Renewable Energy Laboratory, 2010, “Western Wind and Solar Integration Study,” accessible at http://www.nrel.gov/docs/fy10osti/47434.pdf; J.D. Quackenbush and S. Bakkal, 2013, “Readying Michigan to Make Good Energy Decisions: Renewable Energy, ” Michigan Public Service Commission, Licensing and Regulatory Affairs. Michigan Economic Development Corporation, accessible at http://www.michigan.gov/documents/energy/renewable_final_438952_7.pdf. L. Bird, M. Milligan, and D. Lew, 2013, “Integrating Variable Renewable Energy: Challenges and Solutions,” Technical Report, National Renewable Energy Laboratory, September, accessible at http://www.nrel.gov/docs/fy13osti/60451.pdf. 75 Bird, et al., “Integrating Variable Renewable Energy: Challenges and Solutions.” 76 According to DOE, “more than 2,300 circuit miles of new transmission additions were constructed per year, with an additional 18,700 circuit miles planned over the next five years. By comparison, transmission was being constructed at a rate of about 1,000 circuit miles per year as recently as five years ago” Ryan Wiser and Mark Bolinger, “2012 Wind Technologies Market Report,” U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, accessible at http://emp.lbl.gov/sites/all/files/lbnl-6356e.pdf, Bird et al., “Integrating Variable Renewable Energy: Challenges and Solutions.” 77 R. Wiser and M.Bolinger. “2013 Wind Technologies Market Report.” Lawrence Berkeley National Laboratory. Accessible at: <http://emp.lbl.gov/sites/all/files/2013_Wind_Technologies_Market_Report_Final3.pdf>. 78 American Wind Energy Association has identified near-term transmission projects which could integrate almost 70 gigawatts of additional wind capacity if all projects were completed. See Wiser and Bolinger, “2012 Wind Technologies Market Report.” 79 For more information, see M. M. Hand, S. Baldwin, E. DeMeo, J. M. Reilly, T. Mai, D. Arent, G. Porro, M. Meshek, D. Sandor (eds.), Renewable Electricity Futures Study, 4 vols. NREL/TP-6A20-52409, Golden, CO: National Renewable Energy Laboratory, accessible at http://www.nrel.gov/analysis/re_futures/. 80 U.S. Energy Information Administration, “Table 7.2b Electricity Net Generation: Electric Power Sector,” Monthly Energy Review, August 2014, accessible at http://www.eia.gov/totalenergy/data/monthly/index.cfm. 81 U.S. Environmental Protection Agency, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Proposed Rule, pp. 151–52, June 18, 2014, accessible at http://www.gpo.gov/fdsys/pkg/FR-2014-06-18/pdf/2014-13726.pdf. 82 According to EIA, four nuclear units closed in 2013 with additional closures announced for 2014, including Entergy’s Vermont Yankee plant. U.S. Energy Information Administration, 2014, “Table 8.1: Nuclear Energy Overview,” Monthly Energy Review, June 2014, accessible at http://www.eia.gov/totalenergy/data/monthly/pdf/sec8_3.pdf; U.S. Energy Information Administration, “Vermont Yankee Nuclear Plant Closure in 2014 Will Challenge New England Energy Markets,” September 6, 2013, accessible at http://www.eia.gov/todayinenergy/detail.cfm?id=12851. 83 H. Northey, “Nuclear: Spate of Reactor Closures Threatens U.S. Climate Goals – DOE,” Greenwire, February 5, 2014, E&E Publishing, LLC, accessible at http://www.eenews.net/greenwire/stories/1059994082; P. Maloney, “Power Price Recovery May Be too Late to Aid Its Nuclear Plants: Exelon Exec,” Platts.com, April 9, 2014, McGraw Hill Financial, Las Vegas, accessible at http://www.platts.com/latest-news/electric-power/lasvegas/power-price-recovery-may-be-too-late-to-aid-its-21452315. 84 U.S. Environmental Protection Agency, “ Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” Final Rule, October 23, 2015, accessible at http://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22842.pdf 85 Union of Concerned Scientists. 2014. Climate Game Changer. Accessible at: <www.ucsusa.org/sites/default/files/legacy/assets/documents/global_warming/Carbon-Standards-Analysis-Union-of-Concerned-Scientists.pdf>. 86 M. M. Hand, S. Baldwin, E. DeMeo, J. M. Reilly, T. Mai, D. Arent, G. Porro, M. Meshek, and D. Sandor (eds.). Renewable Electricity Futures Study. 4 vols. NREL/TP-6A20-52409. Golden, CO: National Renewable Energy

34

Laboratory. Accessible at: <http://www.nrel.gov/analysis/re_futures/>. Natural Resources Defense Council. 2014. “Cleaner and Cheaper: Using the Clean Air Act to Sharply Reduce Carbon Pollution from Existing Power Plants, Delivering Health, Environmental, and Economic Benefits.” Accessible at: <http://www.nrdc.org/air/pollution-standards/files/pollution-standards-IB-update.pdf>. Union of Concerned Scientists. 2014. Climate Game Changer. Accessible at: http://www.ucsusa.org/sites/default/files/legacy/assets/documents/global_warming/Carbon-Standards-Analysis-Union-of-Concerned-Scientists.pdf.

87 U.S. Department of Energy. 2014. “Saving Energy and Money with Appliance and Equipment Standards in the United States.” Accessible at: <http://energy.gov/sites/prod/files/2014/05/f16/Saving%20Energy%20and%20Money2.pdf>. 88 Unpublished data provided by Energy Efficiency Standards Group, Lawrence Berkeley National Laboratory. See S. Meyers, et al. 2013. “Energy and Economic Impacts of U.S. Federal Energy and Water Conservation Standards.” Accessible at: <http://eetd.lbl.gov/sites/all/files/standards_1987-2012_impacts_overview_lbnl-6217e.pdf>. 89 U.S. Department of Energy (DOE). 2014. “Energy Conservation Standards Activities Report to Congress.” Washington, DC: U.S. Department of Energy. Accessible at: <http://energy.gov/sites/prod/files/2014/08/f18/16th%20Semi-Annual%20Report%20to%20Congress%20on%20Appliance%20Energy%20Efficiency%20Rulemakings.pdf>. 90 N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper (Chapter 2). Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 91 Levelized costs are amortized over the lifetime of the energy resource and discounted back to the year in which the costs are paid and the actions are taken. Costs represent national averages. For more details see American Council for an Energy-Efficient Economy, 2014, The Best Value for America’s Energy Dollar: A National Review of the Cost of Utility Energy Efficiency Programs, accessible at http://www.aceee.org/sites/default/files/publications/researchreports/u1402.pdf. 92 For a more detailed analysis of cost of saved energy across efficiency program types and regions of the United States, see Lawrence Berkeley National Laboratory, 2014, “The Program-Administrator Cost of Saved Energy for Utility Customer-Funded Energy Efficiency Programs.” This analysis found a national average electricity cost of saved energy of about two cents per kilowatt-hour from 2009 through 2011 when gross savings and spending were aggregated at the national level and the cost of saved energy was weighted by savings. The study noted wide variation for results across efficiency program types. 93 U.S. Energy Information Administration (EIA). 2015. “Annual Energy Outlook 2015 – with projections to 2040.” Accessible at: <http://www.eia.gov/forecasts/aeo/>. 94 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/totalenergy/data/monthly/ 95 Unpublished data provided by Energy Efficiency Standards Group, Lawrence Berkeley National Laboratory. See Lawrence Berkeley National Laboratory, 2013, “Energy and Economic Impacts of U.S. Federal Energy and Water Conservation Standards Adopted from 1987 through 2012,” accessible at http://eetd.lbl.gov/sites/all/files/standards_1987-2012_impacts_overview_lbnl-6217e.pdf. 96 For example, see U.S. Department of Energy, ”Revolution Now: The Future Arrives for Four Clean Energy Technologies,” accessible at http://energy.gov/sites/prod/files/2013/09/f2/Revolution%20Now%20--%20The%20Future%20Arrives%20for%20Four%20Clean%20Energy%20Technologies.pdf; and E. Perratore, “LG’s New Dryer Saves Energy and Money: Uses a Hybrid Heat Pump to Recycle Wasted Heat,” Consumer Reports, January 14, accessible at http://www.consumerreports.org/cro/news/2014/01/lg-s-new-dryer-saves-energy-and-money/index.htm. 97 Projections based on 100-percent state adoption of moderate and aggressive building codes, increased stringency of existing appliance standards, and adoption of appliance standards for new products. For more details, see Institute for Electric Innovation (IEE), an institute of the Edison Foundation, 2013, “Factors Affecting Electricity Consumption in the United States (2010-2035),” March, Edison Foundation, accessible at: http://www.edisonfoundation.net/iei/Documents/IEE_FactorsAffectingUSElecConsumption_Final.pdf. 98 There is no single definition of “energy efficiency resource standards.” The 24 states include those that set mandatory, long-term targets for electricity, either as part of a specific standard (with sufficient funding to achieve these targets according to the American Council for an Energy-Efficient Economy), a combined renewable portfolio

35

standard and efficiency standard, or an “all cost-effective” energy policy, and are sufficiently funded to meet these targets. For more details, see http://aceee.org/sites/default/files/publications/researchreports/u1403.pdf. 99 Estimate made using an updated version of the World Resources Institute’s emission model described in “Can the U.S. Get There From Here?” For details about the model, see Bianco et al., 2013, “Can the U.S. Get There from Here?” 100 U.S. Department of Energy, U.S., Building Energy Codes Program, 2013, “National Benefits Assessment 1992-2040,” accessible at http://assets.fiercemarkets.com/public/sites/energy/reports/usdebuildingcodereport.pdf. 101 U.S. Department of Energy (DOE), 2014, Building Energy Codes Program: “Status of State Energy Code Adoption,” July, U.S. DOE Office of Energy Efficiency & Renewable Energy, accessible at http://www.energycodes.gov/adoption/states. 102 Appliance Standards and Rulemaking Federal Advisory Committee Commercial Package Air Conditioners and Commercial Warm Air Furnaces, Working Group Term Sheet, June 15, 2015, http://www.appliance-standards.org/sites/default/files/Term_Sheet_FINAL_June152015.pdf. 103 Natural Resources Defense Council, Major Agreement for Rooftop Air Conditioners Will Lead to Biggest Energy Savings Yet, June 15, 2015, http://switchboard.nrdc.org/blogs/mwaltner/major_agreement_for_rooftop_ai.html. 74 A New Buildings Institute review of nine projects across the country showed that deep commercial retrofits are capable of reducing energy use by 30 percent or more, cutting energy costs in half, and elevating building performance to 50 percent better than the national average. See New Buildings Institute, 2011, “A Search for Deep Energy Savings,” August, accessible at: http://newbuildings.org/sites/default/files/NEEA_Meta_Report_Deep_Savings_NBI_Final8152011.pdf. Residential retrofits through DOE’s Building America program—which aims to reduce energy use in new and existing homes 50 percent by 2017 through cost-effective measures—demonstrate that it is possible to bring existing building performance up to the same standard as best-in-class new construction. Homes in the program demonstrated average energy savings of nearly 60 percent, with some homes reaching as high as 90 percent improvement. Accessible at: http://apps1.eere.energy.gov/buildings/publications/pdfs/building_america/der_pilot_mass_rhodeisland.pdf. 104 A New Buildings Institute review of nine projects across the country showed that deep commercial retrofits are capable of reducing energy use by 30 percent or more, cutting energy costs in half, and elevating building performance to 50 percent better than the national average. See New Buildings Institute, 2011, “A Search for Deep Energy Savings,” August, accessible at http://newbuildings.org/sites/default/files/NEEA_Meta_Report_Deep_Savings_NBI_Final8152011.pdf. Residential retrofits through DOE’s Building America program—which aims to reduce energy use in new and existing homes 50 percent by 2017 through cost-effective measures—demonstrate that it is possible to bring existing building performance up to the same standard as best-in-class new construction. Homes in the program demonstrated average energy savings of nearly 60 percent, with some homes reaching as high as 90 percent improvement. See http://apps1.eere.energy.gov/buildings/publications/pdfs/building_america/der_pilot_mass_rhodeisland.pdf. 105 H. C. Granade, J. Creyts, A. Derkach, P. Farese, S. Nyquist, and K. Ostrowski, 2009, “Unlocking Energy Efficiency in the U.S. Economy,” July 2009, McKinsey Global Energy and Materials, accessible at http://www.greenbuildinglawblog.com/uploads/file/mckinseyUS_energy_efficiency_full_report.pdf. National Academy of Sciences, National Academy of Engineering, and National Research Council, 2010, “Real Prospects for Energy Efficiency in the United States,” The National Academies Press, Washington, DC, accessible at http://www.nap.edu/openbook.php?record_id=12621. 106 U.S. Environmental Protection Agency. 2013. “Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 Through 2013.” Accessible at: <http://www.epa.gov/fueleconomy/fetrends/1975-2013/420r13011.pdf>. 107 U.S. Environmental Protection Agency. 2015. “GHG Emission Standards for Light-Duty Vehicles: Manufacturer Performance Report for the 2013 Model Year.” Accessible at: <http://www.epa.gov/otaq/climate/ghg-report.htm>. Nic Lutsey. 2015. “Do the automakers really need help with the U.S. efficiency standards?” The International Council on Clean Transportation. Accessible at: <http://theicct.org/blogs/staff/do-automakers-really-need-help-us-efficiency-standards>. 108 The Department of Energy has a target of reducing the cost for long-range electric vehicle batteries from $500 per kilowatt hour in 2012 to $125 per kilowatt hour by 2022 (U.S. Department of Energy, 2013,”EV Everywhere Grand Challenge Blueprint,” accessible at:

36

http://energy.gov/sites/prod/files/2014/02/f8/eveverywhere_blueprint.pdf). At this price point, along with other concomitant advancements, DOE expects long-range (280 miles) electric vehicles to be cost-competitive with internal combustion engines (on a levelized total cost of ownership basis over five years). DOE notes that shorter-range electric vehicles and plug-in hybrids would likely become cost-competitive before this price point for long-range electric vehicle batteries is met. Tesla Motors recently announced plans to build facilities by 2017 to produce large electric vehicle batteries that are 30 percent cheaper than today’s batteries (around $190 per kilowatt hour, assuming current reported prices, see Chapter 3 for additional discussion).

109 B. Davis and P. Baxandall. 2013. “Transportation in Transition: A Look at Changing Travel Patterns in America’s Biggest Cities.” U.S. PIRG Education Fund and Frontier Group. Accessible at: <http://www.uspirg.org/sites/pirg/files/reports/US_Transp_trans_scrn.pdf>. 110 For a review of existing and potential new opportunities for federal action in these areas, see: U.S. Department of Energy. 2013. Effects of the Built Environment on Transportation: Energy Use, Greenhouse Gas Emissions, and Other Factors. Accessible at, <http://www.nrel.gov/docs/fy13osti/55634.pdf>. 111 U.S. Environmental Protection Agency and Department of Transportation. 2011. “EPA and NHTSA Adopt First-Ever Program to Reduce Greenhouse Gas Emissions and Improve Fuel Efficiency of Medium- and Heavy Duty Vehicles.” Accessible at: http://www.epa.gov/otaq/climate/documents/420f11031.pdf. U.S. Environmental Protection Agency and National Highway Traffic Safety Administration. 2011. “Final Rulemaking to Establish Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles: Regulatory Impact Analysis.” Accessible at: <http://www.epa.gov/otaq/climate/documents/420r11901.pdf>. 112 U.S. Environmental Protection Agency and U.S. Department of Transportation, Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase 2, RIN 2060-AS16; RIN 2127-AL52, June 19, 2015, http://www.epa.gov/oms/climate/documents/hd-ghg-fr-notice.pdf. 113 ACEEE et al. (2014) found that many technologies could be used to achieve the highest level of reductions, including tractor aerodynamic enhancements and integration with the trailer, hybridization and electric drive, engine downsizing, dual-stage turbocharging, trailer aerodynamic enhancements, low rolling resistance tires, weight reduction, idle reduction, among other technologies that would improve engine, transmission and driveline, and vehicle and trailer performance. They also found that “a new truck that includes an advanced engine and transmission, new axle design, and improved aerodynamics to the tractor and trailer could save average tractor-trailer owners and drivers about $30,000 per year in fuel. In 2025, these new efficiency technologies would increase truck purchase costs by about $32,000, which is recovered by fuel savings in just 13 months.” See: American Council for an Energy Efficient Economy, Environmental Defense Fund, Natural Resources Defense Council, Sierra Club, and Union of Concerned Scientists. 2014. “Big Fuel Savings Available in New Trucks.” Accessible at: <http://aceee.org/files/pdf/fact-sheet/truck-savings-0614.pdf>. 114 United States Aviation Greenhouse Gas Emissions Reduction Plan, June 2012, https://www.faa.gov/about/office_org/headquarters_offices/apl/environ_policy_guidance/policy/media/Aviation_Greenhouse_Gas_Emissions_Reduction_Plan.pdf 115 Federal Aviation Administration. 2012. Next Gen Implementation Plan. Accessible at: <http://www.faa.gov/nextgen/implementation/media/NextGen_Implementation_Plan_2012.pdf>. 116 U.S. Environmental Protection Agency, 40 CFR Parts 87 and 1068, Proposed Finding that Greenhouse Gas Emissions from Aircraft Cause or Contribute to Air Pollution that May Reasonably Be Anticipated to Endanger Public Health and Welfare and Advance Notice of Proposed Rulemaking, RIN 2060-AS31, June 10, 2015, http://www.epa.gov/otaq/documents/aviation/aircraft-ghg-pr-anprm-2015-06-10.pdf 117 U.S. Environmental Protection Agency, 2010, EPA Analysis of the Transportation Sector, http://www.epa.gov/oms/climate/GHGtransportation-analysis03-18-2010.pdf. 118 Total national energy use and GHG emissions are commonly classified into four end-use sectors: residential, commercial, industrial, and transportation. From an end-use perspective, industry includes energy transformation activities such as electricity generation, petroleum refining, and natural gas production. This assessment also includes overlapping analysis of these energy transformation activities as key areas for reducing U.S. GHG emissions. 119 See real (2009) value-added data at http://www.bea.gov/industry/gdpbyind_data.htm; emissions data from http://www.eia.gov/totalenergy/data/monthly/pdf/sec12_7.pdf.

37

120 For examples from the U.S. pulp and paper sector, see Aden, et al. (2013) http://pdf.wri.org/energy-efficiency-in-us-manufacturing-midwest-pulp-and-paper.pdf 121 DOE. 2015. Barriers to Industrial Energy Efficiency. http://energy.gov/eere/amo/articles/barriers-industrial-energy-efficiency-report-congress-released 122 These emissions numbers include both direct emissions and indirect emissions attributable to electricity use. U.S. Energy Information Administration. “Table 12.4 Carbon Dioxide Emissions From Energy Consumption: Industrial Sector.” Electricity Power Monthly. Accessible at: <http://www.eia.gov/totalenergy/data/monthly/>. 123 For more information on emerging digital manufacturing technologies, see McKinsey’s recent analysis at http://www.mckinsey.com/insights/manufacturing/manufacturings_next_act. 124 DOE. 2015. Annual Energy Outlook 2015 with Projections to 2014. Accessible at, http://www.eia.gov/forecasts/aeo/ 125 DOE. 2015. Barriers to Industrial Energy Efficiency. http://energy.gov/eere/amo/articles/barriers-industrial-energy-efficiency-report-congress-released 126 U.S. Energy Information Administration. “AEO 2014 Reference Case.” Accessible at: <http://www.eia.gov/forecasts/aeo/>. 127 For extensive discussion of barriers to U.S. industrial energy efficiency, see DOE. 2015. Barriers to Industrial Energy Efficiency. http://energy.gov/eere/amo/articles/barriers-industrial-energy-efficiency-report-congress-released. 128 National Academy of Sciences, National Academy of Engineering, and National Research Council. 2010. “Real Prospects for Energy Efficiency in the United States.” Washington, DC: National Academies Press (NAP). Accessible at: <http://www.nap.edu/openbook.php?record_id=12621>. 129 http://energy.gov/eere/amo/advanced-manufacturing-office 130 http://arpa-e.energy.gov/ 131 http://energy.gov/eere/amo/advanced-manufacturing-office 132 Methane is the primary component of natural gas, but gas also has significant concentrations of volatile organic compounds–many of which are precursors to ground-level ozone formation. Hazardous air pollutants are present in unprocessed natural gas. For more information, see R. Lattanzio, “Air Quality Issues in Natural Gas Systems,” Congressional Research Service, March 2013, accessible at http://www.civil.northwestern.edu/docs/Tight-Shale-Gas-2013/Air-Quality-Issues-Natural-Gas-Ratner-2013.pdf. 133 According to the latest estimates from the Intergovernmental Panel on Climate Change, because it is a powerful but short-lived greenhouse gas, methane traps 34 times as much heat in the atmosphere as CO2 over 100 years, and 86 times as much over 20 years. See G. Myhre and D.Shindell, “Anthropogenic and Natural Radiative Forcing,” in Climate Change 20013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge, UK: Cambridge University Press, accessible at http://www.climatechange2013.org/images/report/WG1AR5_Chapter08_FINAL.pdf. 134 Here, “natural gas systems” refers to the production of natural gas from natural gas wells, as well as the processing, transmission, and distribution of that gas. Natural gas produced at oil wells is not included. Similarly, the end use of natural gas – for electricity generation, transportation, residential heating, or other purposes – is not included. 135 ICF International, 2014, “Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas Industries,” March, Fairfax, VA, accessible at http://www.edf.org/sites/default/files/methane_cost_curve_report.pdf. 136 For more information on these technologies and practices, see Obeiter, M. and C. Weber. 2015. “Reducing Methane Emissions From Natural Gas Development: Strategies for State-Level Policymakers.” Working Paper. Washington, DC: World Resources Institute. Accessible at: www.wri.org/publication/reducing-methane-emissions. 137 U.S. Environmental Protection Agency, 2014, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2012. Chapter 3: Energy,” April, EPA, Washington DC, accessible at http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html. 138 S. Harvey, V. Gowrishankar, and T. Singer, 2012, “Leaking Profits: The U.S. Oil and Gas Industry Can Reduce Pollution, Conserve Resources, and Make Money by Preventing Methane Waste,” March, Natural Resources Defense Council, New York, NY, accessible at http://www.nrdc.org/energy/leaking-profits.asp; and ICF International, 2014, “Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and

38

Natural Gas Industries,” March, Fairfax, VA, accessible at http://www.edf.org/sites/default/files/methane_cost_curve_report.pdf.

139 U.S. Environmental Protection Agency, “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews,” accessible at http://www.epa.gov/airquality/oilandgas/pdfs/20120417finalrule.pdf. 140 N. Fann, C.M. Fulcher, and B.J. Hubbell, “The Influence of Location, Source, and Emission Type in Estimates of Human Health Benefits of Reducing a Ton of Air Pollution,” Air Quality, Atmosphere, & Heath, September 2009: 169-76, accessible at http://www.ncbi.nlm.nih.gov/pubmed/19890404. 141 U.S. Environmental Protection Agency, 40 CFR Part 60 [EPA–HQ–OAR–2010–0505; FRL–9929–75– OAR], September 2015, “Oil and Natural Gas Sector: Emission Standards for New and Modified Sources,” http://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-21023.pdf 142 ICF International. 2014. “Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas Industries.” Accessible at: <http://www.edf.org/sites/default/files/methane_cost_curve_report.pdf>. For reference, the daily spot price for natural gas in 2014 ranged from $2.81 to $8.35 per thousand cubic feet, with an average price of $4.48. See: <http://www.eia.gov/dnav/ng/hist/rngwhhdD.htm>. 143 N. Bianco, K. Meek, R. Gasper, M. Obeiter, S. Forbes, and N. Aden. 2014. “Seeing is Believing: Creating a New Climate Economy in the United States.” Working Paper. Washington, DC: World Resources Institute. Accessible at: <http://www.wri.org/publication/new-climate-economy>. 144 Coca-Cola Company, 2014, “Coca-Cola Installs 1 Millionth HFC-Free Cooler Globally, Preventing 5.25MM Metric Tons of CO2,” Press Release, January 22, accessible at http://www.coca-colacompany.com/press-center/press-releases/coca-cola-installs-1-millionth-hfc-free-cooler-globally-preventing-525mm-metrics-tons-of-co2#TCCC. 145 Ibid. 146 PepsiCo, “PepsiCo Debuts Energy-Efficient, HFC-Free Cooler at Super Bowl,” Press Release, February 2010, accessible at http://www.pepsico.com/Media/PressRelease/PepsiCo-Debuts-Energy-Efficient-HFC-Free-Cooler-at-Super-Bowl02022010.html; Red Bull, “Efficient Cooling through Ecofriendly Coolers,” accessible at http://energydrink.redbull.com/coolers; Heineken, “2013 Sustainability Report,” accessible at http://sustainabilityreport.heineken.com/The-big-picture/What-we-said-and-what-weve-done/index.htm; Hydrocarbons 21, “Heineken’s Successful Rollout of HC Coolers- Exclusive Interview with Maarten ten Houten,” December 2013, accessible at http://www.hydrocarbons21.com/news/viewprintable/4760; Ben & Jerry’s, “Experience with Natural Refrigerants,” accessible at http://www.atmo.org/presentations/files/124_3_Asch_Ben_n_Jerry.pdf. 147 Honeywell, “Auto Industry Conversion Update,” obtained from Thomas Morris, director of commercial development, Honeywell, July 25, 2014. 148 HFO-1234yf has a GWP of 4 whereas the current refrigerant, HFC-134a, has a GWP of 1,430. See U.S. Environmental Protection Agency, “Final Rulemaking Protection of the Stratospheric Ozone: New Substitute in the Motor Vehicle Air Conditioning Sector under the Significant New Alternatives Policy (SNAP) Program,” Fact Sheet, accessible at http://www.epa.gov/ozone/downloads/HFO-1234yf_Final_Fact_Sheet.pdf. 149 Simon Warburton, “Honeywell Fights Back Against r1234yf Claims,” Just Auto, May 2014, accessible at http://www.just-auto.com/news/honeywell-fights-back-against-r1234yf-claims_id145919.aspx. 150 DuPont, “Rapid Growth Expected in Adoption of HFO-1234yf,” accessible at http://us.vocuspr.com/Newsroom/MultiQuery.aspx?SiteName=DupontEMEA&Entity=PRAsset&SF_PRAsset_PRAssetID_EQ=128793&XSL=NewsRelease&IncludeChildren=True&Lang=English. 151 Michael Parr, federal government affairs manager, DuPont, personal communication, July 24, 2014. 152 Advance, unedited compilation of the decisions adopted by the Twenty-Seventh Meeting of the Parties to the Montreal Protocol. Accessible at <http://conf.montreal-protocol.org/meeting/mop/mop-27/report/SitePages/Home.aspx> 153 U.S. Environmental Protection Agency. 2011. “EPA and NHTSA Adopt First-Ever Program to Reduce Greenhouse Gas Emissions and Improve Fuel Efficiency of Medium- and Heavy-Duty Vehicles.” Accessible at: <http://www.epa.gov/otaq/climate/documents/420f11031.pdf>. 154 U.S. Environmental Protection Agency. 2014. “Protection of Stratospheric Ozone Change of Listing Status for Certain Substitutes under the Significant New Alternatives Policy Program.” 40 CFR, Part 82. Accessible at: <

39

http://www3.epa.gov/ozone/downloads/SAN_5750_SNAP_Status_Change_Rule_NPRM_signature_version-signed_7-9-2014.pdf>

155 U.S. Environmental Protection Agency. 2015. “Protection of Stratospheric Ozone: Change of Listing Status for Certain Substitutes Under the Significant New Alternatives Policy Program; Final Rule.” Accessible at: http://www.gpo.gov/fdsys/pkg/FR-2015-07-20/pdf/2015-17066.pdf. 156 U.S. Environmental Protection Agency. 2015. “Protection of Stratospheric Ozone: Update to the Refrigerant Management Requirements under the Clean Air Act.” Available at: http://www2.epa.gov/sites/production/files/2015-10/documents/608proposal.pdf. 157 Available at: < http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=climate-smart.html>. 158 UNFCCC, 2015, “INDCs as communicated by Parties”, accessible at http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx. 159 OCN/CAIT Climate Data Explorer, 2015, “Paris Contributions Map”, accessible at http://cait.wri.org/indc/. Last accessed November 10, 2015. 160 WRI, “What Effect Will National Climate Plans (INDCs) Have on Global Emissions? 5 Things to Know”, Blog, October 30, 2015, accessible at http://www.wri.org/blog/2015/10/what-effect-will-national-climate-plans-indcs-have-global-emissions-5-things-know. 161 UNFCCC, 2015, “Synthesis report on the aggregate effect of INDCs”, accessible at http://unfccc.int/focus/indc_portal/items/9240.php. 162 WRI, “What Effect Will National Climate Plans (INDCs) Have on Global Emissions? 5 Things to Know”, Blog, October 30, 2015, accessible at http://www.wri.org/blog/2015/10/what-effect-will-national-climate-plans-indcs-have-global-emissions-5-things-know. WRI, CAIT Climate Data Explorer, Pre-2020 Pledges Map, accessible at <http://cait.wri.org/pledges>. 163 WRI, “National Climate Plans (INDCs), by the Numbers”, Blog, October s30, 2015, accessible at http://www.wri.org/blog/2015/10/national-climate-plans-indcs-numbers. 164 UNFCCC, 2015, “INDCs as communicated by Parties”, accessible at http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx. 165 WRI, OCN/CAIT Climate Data Explorer, Pre-2020 Pledges Map, accessible at <http://cait.wri.org/pledges>. 166 WRI, “Total Renewable Energy from 8 Top GHG Emitters Set to Double by 2030”, Blog, Nov 5, 2015, accessible at http://www.wri.org/blog/2015/11/total-renewable-energy-8-top-ghg-emitters-set-double-2030. 167 WRI, 2015, “Assessing the Post-2020 Clean Energy Landscape”, accessible at http://www.wri.org/publication/clean-energy-landscape. 168 WRI, OCN/CAIT Climate Data Explorer, 2015, “Paris Contributions Map”, accessible at http://cait.wri.org/indc/ 169 WRI, “National Climate Plans (INDCs), by the Numbers”, Blog, October 30, 2015, accessible at http://www.wri.org/blog/2015/10/national-climate-plans-indcs-numbers. 170 WRI, “What Effect Will National Climate Plans (INDCs) Have on Global Emissions? 5 Things to Know”, Blog, October 30, 2015, accessible at http://www.wri.org/blog/2015/10/what-effect-will-national-climate-plans-indcs-have-global-emissions-5-things-know. 171 White House Office of the Press Secretary, “FACT SHEET: U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation” (November 11, 2014) http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c 172 “Enhanced Actions on Climate Change: China’s Intended Nationally Determined Contributions”, submitted to UNFCCC June 30, 2015 (scroll to page 17 for English translation) http://www4.unfccc.int/submissions/INDC/Published%20Documents/China/1/China’s%20INDC%20-%20on%2030%20June%202015.pdf 173 “U.S.-China Climate Leaders’ Declaration”, On the Occasion of the First Session of the U.S.-China Climate-Smart/Low-Carbon Cities Summit, Los Angeles, CA, September 15-16, 2015 https://www.whitehouse.gov/sites/default/files/us_china_climate_leaders_declaration_9_14_15_730pm_final.pdf 174 White House Office of the Press Secretary, “Fact Sheet: U.S.-China Climate Leaders Summit” (September 15, 2015) https://www.whitehouse.gov/the-press-office/2015/09/15/fact-sheet-us-%E2%80%93-china-climate-leaders-summit

40

175 “Assessing Implementation of China’s Climate Policies in the 12th 5-Year Period, Ranping Song, Wenjuan Dong, Jingjing Zhu, Xiaofan Zhao, and Yufei Wang.” Working Paper, 2015. Washington, DC: World Resources Institute. http://www.wri.org/publication/assessing-implementation-chinas-climate-policies-12th-5-year-period 176 http://www.chinafaqs.org/blog-posts/chinas-state-council-unveils-40-45-carbon-intensity-target 177 One-page summary of report: Tsinghua-MIT China Energy and Climate Project, “An Energy Outlook for China” (2014) http://globalchange.mit.edu/files/document/CECP_2014_Outlook.pdf; full report: Xiliang Zhang, Valerie J. Karplus, Tianyu Qi, Da Zhang and Jiankun He, “Carbon emissions in China: How far can new efforts bend the curve?” (2014) http://globalchange.mit.edu/CECP/files/document/MITJPSPGC_Rpt267.pdf; Regarding the need for stronger efforts beyond current policies, see also http://www.chinafaqs.org/blog-posts/stronger-commitments-china-and-us-are-breakthrough-international-climate-action 178 “FACT SHEET: U.S.-China Joint Announcement” (November 11, 2014) 179 Zhang et al, “Carbon emissions in China” (2014) http://globalchange.mit.edu/CECP/files/document/MITJPSPGC_Rpt267.pdf; He Jiankun, Yu Zhiwei and Zhang Da, “China’s strategy for energy development and climate change mitigation” (2012) http://www.sciencedirect.com/science/article/pii/S0301421512003370; Kejun Jiang, Xing Zhuang, Ren Miao and Chenmin He, “China’s role in attaining the global 2 ̊C target” (2013) http://www.tandfonline.com/doi/abs/10.1080/14693062.2012.746070#.U9vjQ_ldXhA 180 http://www.reuters.com/article/2014/11/18/us-china-coal-climatechange-idUSKCN0J20XF20141118 181 China National Development and Reform Commission, “China’s Policies and Actions on Climate Change” (November 2014), pages 3-8 http://www.sdpc.gov.cn/gzdt/201411/W020141126538031815914.pdf 182 WRI. 2015. Renewable Energy in China: A Graphical Overview of 2014. Accessible at, http://www.chinafaqs.org/files/chinainfo/ChinaFAQs_Renewable_Energy_Graphical_Overview_of_2014.pdf 183 Ibid. 184 WRI. 2014. Table: What are China’s National Climate and Energy Targets? Accessible at, http://www.chinafaqs.org/files/chinainfo/ChinaFAQs_table_China_climate_energy_targets_0.pdf; South China Morning Post. “China announces Massive Boost in Solar Energy Target to Help Fight Pollution.” March 19, 2015. Accessible at: http://www.scmp.com/news/china/article/1741419/china-announces-massive-boost-solar-energy-target-help-fight-pollution; China’s Energy Development Strategy and Action Plan (2014-2020) (in Chinese) http://news.xinhuanet.com/2014-11/19/c_1113313588.htm 185 Kashi, David. “China Bans New Coal Plants In Three Of Its Biggest Industrial Regions In An Attempt To Curb Air Pollution.” International Business Times, September 13, 2013. Accessible at, http://www.ibtimes.com/china-bans-new-coal-plants-three-its-biggest-industrial-regions-attempt-curb-air-pollution-1405362. 186 Li Shuo and Lauri Myllyvirta, “The End of China’s Coal Boom—6 Facts You Should Know” (2014) http://www.greenpeace.org/international/Global/international/briefings/climate/2014/The-End-of-Chinas-Coal-Boom.pdf

187 “Enhanced Actions on Climate Change: China’s Intended Nationally Determined Contributions”, submitted to UNFCCC June 30, 2015 (scroll to page 17 for English translation) http://www4.unfccc.int/submissions/INDC/Published%20Documents/China/1/China's%20INDC%20-%20on%2030%20June%202015.pdf 188 http://iepd.iipnetwork.org/policy/top-10000-energy-consuming-enterprises-program 189 S. Yu, M. Evans and Q. Shi, “Analysis of the Chinese Market for Building Energy Efficiency”. Pacific Northwest National Laboratory, prepared for the U.S. Department of Energy (March 2014) http://www.pnnl.gov/main/publications/external/technical_reports/PNNL-22761.pdf 190 http://www.reuters.com/article/2013/03/21/china-auto-fuel-idUSL3N0CC2EK20130321; White House Office of the Press Secretary, “FACT SHEET: The United States and China Issue Joint Presidential Statement on Climate Change with New Domestic Policy Commitments and a Common Vision for an Ambitious Global Climate Agreement in Paris” (September 25, 2015) https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-united-states-and-china-issue-joint-presidential-statement 191 “Fact Sheet: The United States and China Issue Joint Presidential Statement” (September 25, 2015). https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-united-states-and-china-issue-joint-presidential-statementThe ETS will initially cover key energy-intensive industries such as iron and steel, power generation, chemicals, building materials, paper-making, non-ferrous metals, and cement. According to a

41

statement by China’s economic development planning agency in 2014, some provinces will be allowed to delay participation in the emissions trading system if they do not have the technical infrastructure to participate from the beginning. http://www.nytimes.com/2014/09/01/business/international/china-plans-a-market-for-carbon-permits.html?ref=business&r=1 192 Zhang et al, “Carbon emissions in China” (2014) 193 Fergus Green and Nicholas Stern, “China’s ‘new normal’: structural change, better growth, and peak emissions”, Policy Brief (June 2015) http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2015/06/Chinas_new_normal_green_stern_June_2015.pdf; https://www.whitehouse.gov/the-press-office/2015/09/25/remarks-president-obama-and-president-xi-peoples-republic-china-joint; http://www.brookings.edu/research/articles/2014/07/15-sino-shift-dollar; China State Council, “‘Made in China 2025’ plan issued” (May 19, 2015) http://english.gov.cn/policies/latest_releases/2015/05/19/content_281475110703534.htm 194 Carbon Tracker Initiative, “The Great Coal Cap: China’s energy policies and the financial implications for thermal coal” (2014) http://www.carbontracker.org/report/the-great-coal-cap-chinas-energy-policies-and-the-financial-implications-for-thermal-coal/ 195 http://www.chinafaqs.org/blog-posts/making-plans-steps-development-chinas-crucial-13th-five-year-plan 196 Green and Stern, “China’s ‘new normal’” (2015); http://energydesk.greenpeace.org/2015/09/09/china-coal-demand-falls-for-eleven-straight-months/; John A. Mathews and Hao Tan, “A ‘Great Reversal’ in China? Coal continues to decline with enforcement of environmental laws” (August 2015) http://www.japanfocus.org/-Hao-Tan/4365/article.html 197 E.g. variation in hydroelectric power generation due to hydrological conditions 198 Green and Stern, “China’s ‘new normal’” (2015); http://www.nytimes.com/2015/09/22/world/asia/fading-coal-industry-in-china-may-offer-chance-to-aid-climate.html?ref=world&_r=1; http://www.smh.com.au/business/china/chinas-economic-shift-promises-to-aid-climate-fight-but-packs-a-commodity-punch-20151005-gk1jz5.html 199 Government of Brazil, “Intended Nationally Determined Contribution”, submitted on September 28, 2015, accessible at http://www4.unfccc.int/submissions/INDC/Published%20Documents/Brazil/1/BRAZIL%20iNDC%20english%20FINAL.pdf. 200 WRI, 2015, “Assessing the Post-2020 Clean Energy Landscape”, accessible at http://www.wri.org/publication/clean-energy-landscape. 201 Through a tremendous decline in the rate of Amazon deforestation from 2006–13, Brazil has avoided 3.2 gigatons of CO2 emissions to the atmosphere, compared with the historic baseline (annual average 1996–2005). Nepstad et al., 2014, accessible at Science 344, http://earthinnovation.org/our-work/global/redd-policy-initiative/. 202 National Geographic, “Brazil Leads World in Reducing Carbon Emissions by Slashing Deforestation,” June 5, 2014, http://news.nationalgeographic.com/news/2014/06/140605-brazil-deforestation-carbonemissions-environment/. 203 Government of India, “Intended Nationally Determined Contribution”, submitted on October 1, 2015, accessible at http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pdf. 204 Renewable Energy Policy Network for the 21st Century (REN21). 2015. Renewables 2015 Global Status Report. Accessible at: http://www.ren21.net/wp-content/uploads/2015/07/REN12-GSR2015_Onlinebook_low1.pdf. 205 WRI, 2015, “Assessing the Post-2020 Clean Energy Landscape”, accessible at http://www.wri.org/publication/clean-energy-landscape. India’s INDC specifies this target is achievable with the help of the transfer of technology and low cost international finance including from the Green Climate Fund. 206 Government of Mexico, “Intended Nationally Determined Contribution”, submitted on March 30, 2015, accessible at http://www4.unfccc.int/submissions/INDC/Published%20Documents/Mexico/1/MEXICO%20INDC%2003.30.2015.pdf. 207 UNFCCC, 2010, “Cancun Agreements”, accessible at http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=2.

42

208 IEA, 2015, “Energy and Climate Change”, accessible at https://www.iea.org/media/news/WEO_INDC_Paper_Final_WEB.PDF. 209 IEA, 2015, “Energy Technology Perspectives”, accessible at https://www.iea.org/etp/. The ETP’s 6DS scenario is “largely an extension of current trends and “broadly consistent with the WEO Current Policy Scenario through 2040.” It is associated with a global temperature rise above pre-industrial levels of almost 4 degrees Celsius by the end of this century. 210 UNFCCC, 2015, “Synthesis report on the aggregate effect of INDCs”, accessible at http://unfccc.int/focus/indc_portal/items/9240.php. 211 WRI, 2015. “STATEMENT: WRI's Taryn Fransen Says UNEP Gap Report "Underscores The Importance of Reaching a Global Climate Agreement", accessible at http://www.wri.org/news/2015/11/statement-wris-taryn-fransen-says-unep-gap-report-underscores-importance-reaching. 212 Global Commission on the Economy and Climate, 2015, “Seizing the Global Opportunity: Partnerships for Better Growth and a Better Climate,” available at http://2015.newclimateeconomy.report/wp-content/uploads/2014/08/NCE-2015_Seizing-the-Global-Opportunity_web.pdf. 213 WRI & UNDP, 2015, “Designing and Preparing Intended Nationally Determined Contributions (INDCs)”, accessible at http://www.wri.org/sites/default/files/designing-preparing-indcs-report.pdf. 214 UNFCCC, 2010, “Cancun Agreements”, accessible at http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=2. 215 White House Office of the Press Secretary, “FACT SHEET: The United States and China Issue Joint Presidential Statement on Climate Change with New Domestic Policy Commitments and a Common Vision for an Ambitious Global Climate Agreement in Paris” (September 25, 2015) https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-united-states-and-china-issue-joint-presidential-statement 216 Peru, Colombia, Mexico, Mongolia, South Korea, Indonesia, Chile, and Panama have made pledges to the Green Climate Fund. 217 “World Bank Group. 2014. “Turn Down the Heat: Confronting the New Climate Normal.” Washington, DC: World Bank.